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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of report (Date of earliest event reported): February 5, 2019
 
THE ALLSTATE CORPORATION
(Exact name of registrant as specified in its charter)
 
Delaware
 
1-11840
 
36-3871531
(State or other
jurisdiction of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
2775 Sanders Road, Northbrook, Illinois
60062
(Address of principal executive offices)
(Zip Code)
 
Registrant’s telephone number, including area code  (847) 402-5000
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
 
Emerging growth company
____

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ____





1


Section 2 – Financial Information
 
Item 2.02.                             Results of Operations and Financial Condition.
 
The Registrant’s press release dated February 5, 2019, announcing its financial results for the fourth quarter of 2018, and the Registrant’s fourth quarter 2018 investor supplement are furnished as Exhibits 99.1 and 99.2, respectively, to this report.  The information contained in the press release and the investor supplement are furnished and not filed pursuant to instruction B.2 of Form 8-K.
 
Section 9 – Financial Statements and Exhibits
 
Item 9.01.                             Financial Statements and Exhibits.
 
(d)  Exhibits
 
99.1                                                Registrant’s press release dated February 5, 2019
99.2                                                Fourth quarter 2018 Investor Supplement of The Allstate Corporation

































2


SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
THE ALLSTATE CORPORATION
 
(Registrant)
 
 
 
 
By:
/s/ Eric K. Ferren
 
Name: Eric K. Ferren
 
Title: Senior Vice President, Controller and Chief Accounting Officer

Date: February 5, 2019

3
Exhibit

Exhibit 99.1

https://cdn.kscope.io/33dcbe7fec28b5012bf8c108f3c1cee2-earningsreleaseimagea16.jpg
FOR IMMEDIATE RELEASE

Contacts:    
Greg Burns                John Griek
Media Relations          Investor Relations
(847) 402-5600                (847) 402-2800

Allstate Delivers Strong Growth and Attractive Returns in 2018
Continues to broaden portfolio of protection solutions

NORTHBROOK, Ill., February 5, 2019 – The Allstate Corporation (NYSE: ALL) today reported financial results for the fourth quarter of 2018.
The Allstate Corporation Consolidated Highlights
 
Three months ended December 31,
 
Twelve months ended December 31,
($ in millions, except per share data and ratios)
2018
2017
% / pts
Change
 
2018
2017
% / pts
Change
Consolidated revenues
$
9,481

$
10,062

(5.8
)
 
$
39,815

$
39,407

1.0

Net income (loss) applicable to common shareholders
(312
)
1,220

NM

 
2,104

3,073

(31.5
)
per diluted common share
(0.91
)
3.35

NM

 
5.96

8.36

(28.7
)
Adjusted net income*
430

762

(43.6
)
 
2,851

2,467

15.6

per diluted common share*
1.24

2.09

(40.7
)
 
8.07

6.71

20.3

Return on common shareholders’ equity (trailing twelve months)
 
 
 
 
 
Net income applicable to common shareholders
 
 


 
10.5
%
15.5
%
(5.0
)
Adjusted net income*
 
 


 
14.8
%
13.4
%
1.4

Book value per common share
 
 


 
57.56

57.58

—

Property-Liability combined ratio
 
 
 
 
 
 
 
Recorded
97.0

91.0

6.0

 
93.6

93.6

—

Underlying combined ratio* (excludes catastrophes, prior year reserve reestimates and amortization of purchased intangibles)
86.8

85.7

1.1

 
85.8

84.9

0.9

Property and casualty insurance premiums written
8,859

8,147

8.7

 
34,986

32,742

6.9

Catastrophe losses
963

599

60.8

 
2,855

3,234

(11.7
)
Total policies in force (in thousands)
 
 


 
113,892

82,276

38.4

*
Measures used in this release that are not based on accounting principles generally accepted in the United States of America (“non-GAAP”) are denoted with an asterisk and defined and reconciled to the most directly comparable GAAP measure in the “Definitions of Non-GAAP Measures” section of this document.
NM = not meaningful

“Allstate continues to deliver strong operating results while building the future. The strategy to grow market share in personal protection is working with growth in auto and home insurance, workplace benefits and protection plans. We also expanded identity protection by acquiring InfoArmor. Full year revenues increased to $40.7 billion, excluding realized capital gains and losses. Policies in force increased 2.4% in Allstate Protection insurance, and the addition of 30 million SquareTrade protection policies brought our total to over 113 million. Arity, our connected car platform, is now collecting 10 billion miles of driving data per month through expansion of third-party connectivity,” said Tom Wilson, Chair, President and Chief Executive Officer of The Allstate Corporation.



1

“Operating results for 2018 were strong with achievement of the five Operating Priorities. Customers were better served with increased net promoter scores, which supported higher growth. Attractive returns were generated as the underlying combined ratio was better than the range established at the beginning of the year. Adjusted net income* was $8.07 per share, 20.3% higher than 2017, and adjusted net income return on common shareholders’ equity* was 14.8%. Reflecting these results, the underlying combined ratio* for the Property-Liability business is expected to be between 86 and 88(1) in 2019,” concluded Wilson.

Full Year 2018 Financial Highlights

•
Allstate delivered on the 2018 Operating Priorities, which focus on both near-term performance and long-term value creation.

◦
Better Serve Customers: The Net Promoter Score, which measures how likely customers are to recommend us, increased for all major businesses.

◦
Achieve Target Economic Returns on Capital: Adjusted net income return on shareholders’ equity* was 14.8% for 2018, primarily driven by strong Property-Liability underwriting income. Allstate Life and Allstate Benefits also generated good returns.

◦
Grow Customer Base: Allstate Protection policies in force increased by 2.4% in 2018 to 33.3 million due to a 2.3% increase in the Allstate brand and 10.4% in the Esurance brand. Consolidated policies in force grew to 113.9 million in 2018.

◦
Proactively Manage Investments: Total return on the $81 billion investment portfolio was 0.8% during a volatile 2018, reflecting lower equity and fixed income valuations. Net investment income of $3.2 billion was 4.7% lower than 2017, primarily due to decreased performance-based income compared to a very strong 2017.

◦
Build Long-Term Growth Platforms: SquareTrade continued its rapid growth in 2018 with a 77.1% increase in policies, and acquired PlumChoice to broaden its service offering. In the fourth quarter, Allstate acquired InfoArmor, a fast growing identity protection provider.


Fourth Quarter 2018 Results

•
Total revenue of $9.48 billion in the fourth quarter of 2018 decreased 5.8% compared to the prior year quarter.

◦
Property-Liability insurance premiums earned increased 5.7%.
◦
Service Businesses revenue increased 27.1%.
◦
Life premiums and contract charges increased 4.0%.
◦
Net investment income decreased 13.9%.
◦
Realized capital losses reduced revenues by $894 million.

•
Net loss applicable to common shareholders was $312 million, or $0.91 per diluted share, in the fourth quarter of 2018, compared to net income of $1.22 billion, or $3.35 per diluted share, in the fourth quarter of 2017. Realized capital losses, principally from mark to market losses on the public equity portfolio, more than offset adjusted net income* of $430 million in the fourth quarter. Fourth quarter adjusted net income* was $332 million below the prior year quarter, driven by higher catastrophe losses, lower net investment income and a larger pension settlement charge, partially offset by higher premiums earned and reduced auto insurance accident frequency.



_________
(1) A reconciliation of this non-GAAP measure to the combined ratio, a GAAP measure, is not possible on a forward-looking basis because it is not possible to provide a reliable forecast of catastrophes, and prior year reserve reestimates are expected to be zero because reserves are determined based on our best estimate of ultimate loss reserves as of the reporting date.

2


•
Property-Liability underwriting income of $249 million in the fourth quarter of 2018 was $466 million below the prior year quarter, driven by higher catastrophe losses, increased claim severity and lower favorable prior year reserve reestimates, partially offset by increased premiums earned and reduced auto accident frequency.

◦
The recorded combined ratio of 97.0 for the fourth quarter was 6.0 points above the prior year quarter, primarily driven by catastrophe losses of $963 million, net of reinsurance recoveries of more than $700 million. Hurricane Michael and the Camp and Woolsey wildfires in California accounted for approximately 85% of recorded catastrophe losses in the quarter.

◦
The underlying combined ratio* of 85.8 for the full year 2018 was within the revised annual outlook range of 85 to 87. The underlying combined ratio* of 86.8 for the fourth quarter of 2018 was 1.1 points higher than the prior year quarter, primarily due to adverse non-catastrophe weather related losses in Allstate and Encompass brand homeowners insurance and higher auto claim severity.

Property-Liability Results
 
Three months ended December 31,
 
Twelve months ended December 31,
(% to earned premiums)
2018
2017
pts
Change
 
2018
2017
pts
Change
Recorded Combined Ratio
97.0

91.0

6.0

 
93.6

93.6

—

Allstate Brand Auto
92.9

91.9

1.0

 
91.9

93.2

(1.3
)
Allstate Brand Homeowners
105.7

85.4

20.3

 
93.3

89.4

3.9

Esurance Brand
101.8

100.2

1.6

 
101.3

103.3

(2.0
)
Encompass Brand
102.0

106.4

(4.4
)
 
98.7

103.0

(4.3
)
 
 
 
 
 
 
 
 
Underlying Combined Ratio*
86.8

85.7

1.1

 
85.8

84.9

0.9

Allstate Brand Auto
93.6

94.2

(0.6
)
 
92.2

92.2

—

Allstate Brand Homeowners
61.9

59.9

2.0

 
63.5

60.5

3.0

Esurance Brand
99.8

99.8

—

 
98.3

100.2

(1.9
)
Encompass Brand
101.6

86.4

15.2

 
91.0

86.5

4.5


◦
Allstate brand auto insurance net written premium grew 6.4% in the fourth quarter of 2018 compared to the prior year quarter, reflecting a 2.7% increase in policies in force and higher average premium. The recorded combined ratio of 92.9 in the fourth quarter of 2018 was 1.0 point higher than the prior year quarter. The underlying combined ratio* of 93.6 in the quarter was 0.6 points better than the prior year quarter, due to higher earned premium and lower accident frequency, partially offset by higher physical damage claim severity.

◦
Allstate brand homeowners insurance net written premium grew 4.9% in the fourth quarter of 2018 compared to the prior year quarter and continues to generate attractive returns. The recorded combined ratio of 105.7 in the fourth quarter was 20.3 points higher than the prior year quarter, primarily driven by catastrophe losses of $798 million, compared to $480 million in the prior year quarter. For the full year 2018, the recorded combined ratio was 93.3 and the underlying combined ratio* was 63.5.

◦
Esurance brand net written premium grew 16.3% and policies in force increased 10.4% in the fourth quarter of 2018 compared to the prior year quarter. The recorded combined ratio of 101.8 in the fourth quarter of 2018 was 1.6 points higher than the prior year quarter, driven by elevated claim severity, increased advertising spend and higher catastrophe losses, partially offset by earned premium growth. The underlying combined ratio* of 99.8 in the fourth quarter was in line with the prior year quarter.

◦
Encompass brand net written premium increased 1.6% in the fourth quarter of 2018 compared to the prior year quarter. The recorded combined ratio of 102.0 in the fourth quarter of 2018 was 4.4 points better than the prior year quarter. The underlying combined ratio* of 101.6 in the fourth quarter was 15.2 points higher than the prior year quarter, primarily due to current year reserve strengthening in auto insurance and adverse non-catastrophe weather related losses in homeowners insurance.


3


•
Service Businesses policies in force grew to 74.2 million, and revenues increased 27.1% compared to the prior year quarter. Adjusted net income was $6 million, an increase of $30 million compared to the prior year quarter.

Service Businesses Results
 
Three months ended December 31,
 
Twelve months ended December 31,
($ in millions)
2018
2017
% / $
Change
 
2018
2017
% / $
Change
Total Revenues
$
356

$
280

27.1
%
 
$
1,318

$
1,059

24.5
 %
SquareTrade
137

90

52.2

 
509

297

71.4

Allstate Roadside Services
74

73

1.4

 
302

307

(1.6
)
Allstate Dealer Services
105

97

8.2

 
403

376

7.2

Arity
24

20

20.0

 
88

79

11.4

InfoArmor
16

—

NA

 
16

—

NA

Adjusted Net Income / (Loss)
$
6

$
(24
)
$
30

 
$
2

$
(59
)
$
61

SquareTrade
9

(11
)
20

 
23

(22
)
45

Allstate Roadside Services
(7
)
(7
)
—

 
(23
)
(20
)
(3
)
Allstate Dealer Services
6

—

6

 
15

(2
)
17

Arity
(3
)
(6
)
3

 
(14
)
(15
)
1

InfoArmor
1

—

NA

 
1

—

NA

NA = not applicable
◦
SquareTrade revenue was $137 million in the fourth quarter, reflecting policy growth of 29.9 million compared to the fourth quarter of 2017 and the adoption of the new revenue recognition accounting standard. Adjusted net income was $9 million in the fourth quarter of 2018, due to improved loss experience.

◦
Allstate Roadside Services had revenues of $74 million in the fourth quarter. The adjusted net loss of $7 million in the fourth quarter was comparable to the prior year quarter due to adverse loss experience and expenses associated with the provider network and technology.

◦
Allstate Dealer Services revenue grew 8.2% compared to the fourth quarter of 2017, and adjusted net income was $6 million, reflecting improved loss experience.

◦
Arity revenue was $24 million in the fourth quarter of 2018, primarily from contracts with affiliates. The adjusted net loss of $3 million in the quarter includes investments in research and development.

◦
InfoArmor, an identity protection provider acquired in October 2018, had revenues of $16 million, and adjusted net income of $1 million in the fourth quarter of 2018.

Allstate Life, Benefits and Annuities Results
 
Three months ended December 31,
 
Twelve months ended December 31,
($ in millions)
2018
2017
% Change
 
2018
2017
%
Change
Premiums and Contract Charges
 
 
 
 
 
 
 
Allstate Life
$
340

$
324

4.9
 %
 
$
1,315

$
1,280

2.7
 %
Allstate Benefits
281

273

2.9

 
1,135

1,084

4.7

Allstate Annuities
4

4

—

 
15

14

7.1

Adjusted Net Income
 
 


 
 
 


Allstate Life
$
68

$
57

19.3
 %
 
$
289

$
253

14.2
 %
Allstate Benefits
25

20

25.0

 
119

95

25.3

Allstate Annuities
31

55

(43.6
)
 
130

204

(36.3
)

•
Allstate Life adjusted net income of $68 million in the fourth quarter of 2018 was 19.3% higher than the prior year quarter, driven by a lower effective tax rate and higher premiums and contract charges, partially offset by higher contract benefits.

4


•
Allstate Benefits adjusted net income was $25 million in the fourth quarter of 2018, $5 million higher than the prior year quarter, primarily due to increased premiums and a lower effective tax rate, partially offset by higher expenses.

•
Allstate Annuities adjusted net income was $31 million in the fourth quarter of 2018, $24 million lower than the prior year quarter, primarily due to lower performance-based investment income.

•
Allstate Investments $81 billion portfolio generated net investment income of $786 million in the fourth quarter, which declined $127 million from the prior year quarter due to lower performance-based income.

Allstate Investment Results
 
Three months ended December 31,
 
Twelve months ended December 31,
($ in millions, except ratios)
2018
2017
% / pts
Change
 
2018
2017
% / pts
Change
Net investment income
$
786

$
913

(13.9
)
 
$
3,240

$
3,401

(4.7
)
Market-based investment income(1)
696

664

4.8

 
2,727

2,656

2.7

Performance-based investment income(1)
145

296

(51.0
)
 
716

917

(21.9
)
Realized capital gains and losses(2)
(894
)
127

NM

 
(877
)
445

NM

Change in unrealized net capital gains, pre-tax(3)
(11
)
(120
)
NM

 
(1,434
)
857

NM

Total return on investment portfolio
(0.2
)%
1.1
%
(1.3
)
 
0.8
%
5.9
%
(5.1
)
(1) 
Investment expenses are not allocated between market-based and performance-based portfolios with the exception of investee level expenses.
(2) 
Includes $840 million and $691 million of losses in the fourth quarter and in 2018, respectively, due to the valuation of equity investments.
(3) 
Upon adoption of the recognition and measurement accounting standard on January 1, 2018, $1.2 billion of unrealized net capital gains for equity securities were reclassified to retained income.
NM = not meaningful

◦
Total return on the investment portfolio of -0.2% for the fourth quarter of 2018 and 0.8% for the year included a stable contribution from net investment income but was impacted by lower fixed income and equity valuations.

◦
Market-based investments contributed $696 million of income in the fourth quarter of 2018, an increase of 4.8% compared to the prior year quarter, primarily from higher bond yields and duration extension of the fixed income portfolio.

◦
Performance-based investments generated income of $145 million in the fourth quarter of 2018, a decrease of 51% over a strong prior year quarter, primarily reflecting a lower number of sales of underlying investments.

◦
Net realized capital losses were $894 million in the fourth quarter of 2018, compared to gains of $127 million in the prior year quarter. Net realized losses for the quarter primarily related to lower valuation of equity investments.

◦
Unrealized net capital gains decreased $11 million from the third quarter, as higher market yields resulted in lower fixed income valuations.


Proactive Capital Management

“Allstate provided excellent cash returns to shareholders in 2018 while broadening our business model through acquisitions. We returned $2.8 billion to common shareholders through a combination of $2.2 billion in common share repurchases and $614 million in common stock dividends,” said Mario Rizzo, Chief Financial Officer. “We continued to strategically deploy capital in the fourth quarter, redeeming $385 million of our Series C Preferred Stock, completing the $525 million acquisition of InfoArmor and $30 million acquisition of PlumChoice, and executing a $1 billion accelerated share repurchase program as part of our $3 billion share repurchase authorization.”

5



Visit www.allstateinvestors.com to view additional information about Allstate’s results, including a webcast of its quarterly conference call and the call presentation. The conference call will be held at 9:30 a.m. ET on Wednesday, February 6.


Forward-Looking Statements
This news release contains “forward-looking statements” that anticipate results based on our estimates, assumptions and plans that are subject to uncertainty. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements do not relate strictly to historical or current facts and may be identified by their use of words like “plans,” “seeks,” “expects,” “will,” “should,” “anticipates,” “estimates,” “intends,” “believes,” “likely,” “targets” and other words with similar meanings. We believe these statements are based on reasonable estimates, assumptions and plans. However, if the estimates, assumptions or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties arise, actual results could differ materially from those communicated in these forward-looking statements. Factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements may be found in our filings with the U.S. Securities and Exchange Commission, including the “Risk Factors” section in our most recent annual report on Form 10-K. Forward-looking statements are as of the date on which they are made, and we assume no obligation to update or revise any forward-looking statement.

6

THE ALLSTATE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
 
 
 
 
($ in millions, except par value data)

December 31, 2018
 
December 31, 2017
Assets
(unaudited)
 
 
Investments:
 
 
 
Fixed income securities, at fair value (amortized cost $57,134 and $57,525)
$
57,170

 
$
58,992

Equity securities, at fair value (cost $4,489 and $5,461)
5,036

 
6,621

Mortgage loans
4,670

 
4,534

Limited partnership interests
7,505

 
6,740

Short-term, at fair value (amortized cost $3,027 and $1,944)
3,027

 
1,944

Other
3,852

 
3,972

Total investments
81,260

 
82,803

Cash
499

 
617

Premium installment receivables, net
6,154

 
5,786

Deferred policy acquisition costs
4,784

 
4,191

Reinsurance recoverables, net
9,565

 
8,921

Accrued investment income
600

 
569

Property and equipment, net
1,045

 
1,072

Goodwill
2,530

 
2,181

Other assets
3,007

 
2,838

Separate Accounts
2,805

 
3,444

Total assets
$
112,249

 
$
112,422

Liabilities
 
 
 
Reserve for property and casualty insurance claims and claims expense
$
27,423

 
$
26,325

Reserve for life-contingent contract benefits
12,208

 
12,549

Contractholder funds
18,371

 
19,434

Unearned premiums
14,510

 
13,473

Claim payments outstanding
1,007

 
875

Deferred income taxes
425

 
782

Other liabilities and accrued expenses
7,737

 
6,639

Long-term debt
6,451

 
6,350

Separate Accounts
2,805

 
3,444

Total liabilities
90,937

 
89,871

Shareholders’ equity
 
 
 
Preferred stock and additional capital paid-in, $1 par value, 79.8 thousand and 72.2 thousand shares issued and outstanding, $1,995 and $1,805 aggregate liquidation preference
1,930

 
1,746

Common stock, $.01 par value, 900 million issued, 332 million and 355 million shares outstanding
9

 
9

Additional capital paid-in
3,310

 
3,313

Retained income
45,708

 
43,162

Deferred ESOP expense
(3
)
 
(3
)
Treasury stock, at cost (568 million and 545 million shares)
(28,085
)
 
(25,982
)
Accumulated other comprehensive income:
 
 
 
Unrealized net capital gains and losses:
 
 
 
Unrealized net capital gains and losses on fixed income securities with OTTI
75

 
85

Other unrealized net capital gains and losses
(51
)
 
1,981

Unrealized adjustment to DAC, DSI and insurance reserves
(26
)
 
(404
)
Unrealized net capital gains and losses
(2
)
 
1,662

Unrealized foreign currency translation adjustments
(64
)
 
(9
)
Unrecognized pension and other postretirement benefit cost
(1,491
)
 
(1,347
)
Total accumulated other comprehensive (loss) income
(1,557
)
 
306

Total shareholders’ equity
21,312

 
22,551

Total liabilities and shareholders’ equity
$
112,249

 
$
112,422




7


THE ALLSTATE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
 
 
($ in millions, except per share data)
Three months ended December 31,
 
Twelve months ended December 31,
 
2018
 
2017
 
2018
 
2017
 
(unaudited)
 
 
 
(unaudited)
 
 
Revenues
 
 
 
 
 
 
 
Property and casualty insurance premiums
$
8,707

 
$
8,202

 
$
34,048

 
$
32,300

Life premiums and contract charges
625

 
601

 
2,465

 
2,378

Other revenue
257

 
219

 
939

 
883

Net investment income
786

 
913

 
3,240

 
3,401

Realized capital gains and losses:
 
 
 

 
 
 
 
Total other-than-temporary impairment (“OTTI”) losses
(5
)
 
(11
)
 
(13
)
 
(146
)
OTTI losses reclassified (from) to other comprehensive income
1

 
(2
)
 
(1
)
 
(4
)
Net OTTI losses recognized in earnings
(4
)
 
(13
)
 
(14
)
 
(150
)
Sales and valuation changes on equity investments and derivatives
(890
)
 
140

 
(863
)
 
595

Total realized capital gains and losses
(894
)
 
127

 
(877
)
 
445

 
9,481

 
10,062

 
39,815

 
39,407

 
 
 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
 
 
Property and casualty insurance claims and claims expense
6,081

 
5,279

 
22,839

 
21,929

Life contract benefits
488

 
507

 
1,973

 
1,923

Interest credited to contractholder funds
165

 
168

 
654

 
690

Amortization of deferred policy acquisition costs
1,336

 
1,239

 
5,222

 
4,784

Operating costs and expenses
1,642

 
1,451

 
5,869

 
5,442

Amortization of purchased intangible assets
36

 
25

 
105

 
99

Restructuring and related charges
18

 
32

 
83

 
109

Goodwill impairment
—

 
125

 
—

 
125

Interest expense
81

 
84

 
332

 
335

 
9,847

 
8,910

 
37,077

 
35,436

 
 
 
 
 
 
 
 
Gain on disposition of operations
2

 
5

 
6

 
20

 
 
 
 
 
 
 
 
Income from operations before income tax expense
(364
)
 
1,157

 
2,744

 
3,991

 
 
 
 
 
 
 
 
Income tax expense
(95
)
 
(92
)
 
492

 
802

 
 
 
 
 
 
 
 
Net income
(269
)
 
1,249

 
2,252

 
3,189

 
 
 
 
 
 
 
 
Preferred stock dividends
43

 
29

 
148

 
116

 
 
 
 
 
 
 
 
Net (loss) income applicable to common shareholders
$
(312
)
 
$
1,220

 
$
2,104

 
$
3,073

 
 
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (loss) income applicable to common shareholders per common share – Basic
$
(0.91
)
 
$
3.41

 
$
6.05

 
$
8.49

 
 
 
 
 
 
 
 
Weighted average common shares – Basic
341.9

 
357.5

 
347.8

 
362.0

 
 
 
 
 
 
 
 
Net (loss) income applicable to common shareholders per common share – Diluted
$
(0.91
)
 
$
3.35

 
$
5.96

 
$
8.36

 
 
 
 
 
 
 
 
Weighted average common shares – Diluted
347.1

 
363.8

 
353.2

 
367.8



8

Definitions of Non-GAAP Measures
We believe that investors’ understanding of Allstate’s performance is enhanced by our disclosure of the following non-GAAP measures. Our methods for calculating these measures may differ from those used by other companies and therefore comparability may be limited.
Adjusted net income is net income applicable to common shareholders, excluding:
•
realized capital gains and losses, after-tax, except for periodic settlements and accruals on non-hedge derivative instruments, which are reported with realized capital gains and losses but included in adjusted net income,
•
valuation changes on embedded derivatives not hedged, after-tax,
•
amortization of deferred policy acquisition costs (“DAC”) and deferred sales inducements (“DSI”), to the extent they resulted from the recognition of certain realized capital gains and losses or valuation changes on embedded derivatives not hedged, after-tax,
•
business combination expenses and the amortization of purchased intangible assets, after-tax,
•
gain (loss) on disposition of operations, after-tax, and
•
adjustments for other significant non-recurring, infrequent or unusual items, when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, or (b) there has been no similar charge or gain within the prior two years.
Net income applicable to common shareholders is the GAAP measure that is most directly comparable to adjusted net income.
We use adjusted net income as an important measure to evaluate our results of operations. We believe that the measure provides investors with a valuable measure of the company’s ongoing performance because it reveals trends in our insurance and financial services business that may be obscured by the net effect of realized capital gains and losses, valuation changes on embedded derivatives not hedged, business combination expenses and the amortization of purchased intangible assets, gain (loss) on disposition of operations and adjustments for other significant non-recurring, infrequent or unusual items. Realized capital gains and losses, valuation changes on embedded derivatives not hedged and gain (loss) on disposition of operations may vary significantly between periods and are generally driven by business decisions and external economic developments such as capital market conditions, the timing of which is unrelated to the insurance underwriting process. Consistent with our intent to protect results or earn additional income, adjusted net income includes periodic settlements and accruals on certain derivative instruments that are reported in realized capital gains and losses because they do not qualify for hedge accounting or are not designated as hedges for accounting purposes. These instruments are used for economic hedges and to replicate fixed income securities, and by including them in adjusted net income, we are appropriately reflecting their trends in our performance and in a manner consistent with the economically hedged investments, product attributes (e.g. net investment income and interest credited to contractholder funds) or replicated investments. Business combination expenses are excluded because they are non-recurring in nature and the amortization of purchased intangible assets is excluded because it relates to the acquisition purchase price and is not indicative of our underlying insurance business results or trends. Non-recurring items are excluded because, by their nature, they are not indicative of our business or economic trends. Accordingly, adjusted net income excludes the effect of items that tend to be highly variable from period to period and highlights the results from ongoing operations and the underlying profitability of our business. A byproduct of excluding these items to determine adjusted net income is the transparency and understanding of their significance to net income variability and profitability while recognizing these or similar items may recur in subsequent periods. Adjusted net income is used by management along with the other components of net income applicable to common shareholders to assess our performance. We use adjusted measures of adjusted net income in incentive compensation. Therefore, we believe it is useful for investors to evaluate net income applicable to common shareholders, adjusted net income and their components separately and in the aggregate when reviewing and evaluating our performance. We note that investors, financial analysts, financial and business media organizations and rating agencies utilize adjusted net income results in their evaluation of our and our industry’s financial performance and in their investment decisions, recommendations and communications as it represents a reliable, representative and consistent measurement of the industry and the company and management’s performance. We note that the price to earnings multiple commonly used by insurance investors as a forward-looking valuation technique uses adjusted net income as the denominator. Adjusted net income should not be considered a substitute for net income applicable to common shareholders and does not reflect the overall profitability of our business.

9

The following tables reconcile net income applicable to common shareholders and adjusted net income. Beginning January 1, 2018, the Tax Legislation reduced the U.S. corporate income tax rate from 35% to 21%. Taxes on adjustments to reconcile net income applicable to common shareholders and adjusted net income generally use a 21% effective tax rate for 2018 and 35% for 2017 and are reported net of income taxes as the reconciling adjustment.
($ in millions, except per share data)
Three months ended December 31,
 
Property-Liability
 
Consolidated
 
Per diluted common share
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Net (loss) income applicable to common shareholders
$
(17
)
 
$
767

 
$
(312
)
 
$
1,220

 
$
(0.91
)
 
$
3.35

Realized capital gains and losses, after-tax
516

 
(73
)
 
704

 
(90
)
 
2.03

 
(0.25
)
Valuation changes on embedded derivatives not hedged, after-tax
—

 
—

 
2

 
(2
)
 
0.01

 
(0.01
)
DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives not hedged, after-tax
—

 
—

 
1

 
2

 
—

 
0.01

Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax
(1
)
 
(1
)
 
(1
)
 
(1
)
 
—

 
—

Business combination expenses and the amortization of purchased intangible assets, after-tax
2

 
2

 
35

 
17

 
0.10

 
0.05

Gain on disposition of operations, after-tax
—

 
(2
)
 
(1
)
 
(3
)
 
—

 
(0.01
)
Goodwill impairment
—

 
—

 
—

 
125

 
—

 
0.34

Tax Legislation expense (benefit)
2

 
65

 
2

 
(506
)
 
0.01

 
(1.39
)
Adjusted net income*
$
502

 
$
758

 
$
430

 
$
762

 
$
1.24

 
$
2.09

 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve months ended December 31,
 
Property-Liability
 
Consolidated
 
Per diluted common share
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Net income applicable to common shareholders
$
2,341

 
$
2,587

 
$
2,104

 
$
3,073

 
$
5.96

 
$
8.36

Realized capital gains and losses, after-tax
500

 
(272
)
 
688

 
(298
)
 
1.95

 
(0.81
)
Valuation changes on embedded derivatives not hedged, after-tax
—

 
—

 
(3
)
 
—

 
(0.01
)
 
—

DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives not hedged, after-tax
—

 
—

 
7

 
10

 
0.02

 
0.03

Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax
(2
)
 
(3
)
 
(2
)
 
(3
)
 
(0.01
)
 
(0.01
)
Business combination expenses and the amortization of purchased intangible assets, after-tax
9

 
5

 
90

 
79

 
0.25

 
0.22

Gain on disposition of operations, after-tax
—

 
(9
)
 
(4
)
 
(13
)
 
(0.01
)
 
(0.04
)
Goodwill impairment
—

 
—

 
—

 
125

 
—

 
0.34

Tax Legislation expense (benefit)
5

 
65

 
(29
)
 
(506
)
 
(0.08
)
 
(1.38
)
Adjusted net income*
$
2,853

 
$
2,373

 
$
2,851

 
$
2,467

 
$
8.07

 
$
6.71

Adjusted net income return on common shareholders’ equity is a ratio that uses a non-GAAP measure. It is calculated by dividing the rolling 12-month adjusted net income by the average of common shareholders’ equity at the beginning and at the end of the 12-months, after excluding the effect of unrealized net capital gains and losses. Return on common shareholders’ equity is the most directly comparable GAAP measure. We use adjusted net income as the numerator for the same reasons we use adjusted net income, as discussed above. We use average common shareholders’ equity excluding the effect of unrealized net capital gains and losses for the denominator as a representation of common shareholders’ equity primarily attributable to the company’s earned and realized business operations because it eliminates the effect of items that are unrealized and vary significantly between periods due to external economic developments such as capital market conditions like changes in equity prices and interest rates, the amount and timing of which are unrelated to the insurance underwriting process. We use it to supplement our evaluation of net income applicable to common shareholders and return on common shareholders’ equity because it excludes the effect of items that tend to be highly variable from period to period. We believe that this measure is useful to investors and that it provides a valuable tool for investors when considered along with return on common shareholders’ equity because it eliminates the after-tax effects of realized and unrealized net capital gains and losses that can fluctuate significantly from period to period and that are driven by economic developments, the magnitude and timing of which are generally not influenced by management. In addition, it eliminates non-recurring items that are not indicative of our ongoing business or economic trends. A byproduct of excluding the items noted above to determine adjusted net income return on common shareholders’ equity from return on common shareholders’ equity is the transparency and understanding of their significance to return on common shareholders’ equity variability and profitability while recognizing these or similar items may recur in subsequent periods. We use adjusted measures of adjusted net income return on common shareholders’ equity in incentive compensation. Therefore, we believe it is useful for investors to have adjusted net income return on common shareholders’ equity and return on common shareholders’ equity when evaluating our performance. We note that investors, financial analysts, financial and business media organizations and rating agencies utilize adjusted net income return on common shareholders’ equity results in their evaluation of our and our industry’s financial performance and in their investment decisions, recommendations and communications as it represents a reliable, representative and consistent measurement of the industry and the company and management’s utilization of capital. Adjusted net income return on common shareholders’ equity should not be considered a substitute for return on common shareholders’ equity and does not reflect the overall profitability of our business.

10

The following tables reconcile return on common shareholders’ equity and adjusted net income return on common shareholders’ equity.
($ in millions)
For the twelve months ended December 31,
 
2018
 
2017
Return on common shareholders’ equity
 
 
 
Numerator:
 
 
 
Net income applicable to common shareholders
$
2,104

 
$
3,073

Denominator:
 
 
 
Beginning common shareholders’ equity (1)
$
20,805

 
$
18,827

Ending common shareholders’ equity (1)
19,382

 
20,805

Average common shareholders’ equity
$
20,094

 
$
19,816

Return on common shareholders’ equity
10.5
%
 
15.5
%
($ in millions)
For the twelve months ended December 31,
 
2018
 
2017
Adjusted net income return on common shareholders’ equity
 
 
 
Numerator:
 
 
 
Adjusted net income *
$
2,851

 
$
2,467

 
 
 
 
Denominator:
 
 
 
Beginning common shareholders’ equity (1)
$
20,805

 
$
18,827

Less: Unrealized net capital gains and losses
1,662

 
1,053

Adjusted beginning common shareholders’ equity
19,143

 
17,774

 
 
 
 
Ending common shareholders’ equity (1)
19,382

 
20,805

Less: Unrealized net capital gains and losses
(2
)
 
1,662

Adjusted ending common shareholders’ equity
19,384

 
19,143

Average adjusted common shareholders’ equity
$
19,264

 
$
18,459

Adjusted net income return on common shareholders’ equity *
14.8
%
 
13.4
%
_____________
(1) Excludes equity related to preferred stock of $1,930 million as of December 31, 2018 and $1,746 million as of December 31, 2017 and December 31, 2016.







11

Combined ratio excluding the effect of catastrophes, prior year reserve reestimates and amortization of purchased intangible assets (“underlying combined ratio”) is a non-GAAP ratio, which is computed as the difference between four GAAP operating ratios: the combined ratio, the effect of catastrophes on the combined ratio, the effect of prior year non-catastrophe reserve reestimates on the combined ratio, and the effect of amortization of purchased intangible assets on the combined ratio. We believe that this ratio is useful to investors and it is used by management to reveal the trends in our Property-Liability business that may be obscured by catastrophe losses, prior year reserve reestimates and amortization of purchased intangible assets. Catastrophe losses cause our loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on the combined ratio. Prior year reserve reestimates are caused by unexpected loss development on historical reserves, which could increase or decrease current year net income. Amortization of purchased intangible assets relates to the acquisition purchase price and is not indicative of our underlying insurance business results or trends. We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our underwriting performance. We also provide it to facilitate a comparison to our outlook on the underlying combined ratio. The most directly comparable GAAP measure is the combined ratio. The underlying combined ratio should not be considered a substitute for the combined ratio and does not reflect the overall underwriting profitability of our business.
The following tables reconcile the respective combined ratio to the underlying combined ratio. Underwriting margin is calculated as 100% minus the combined ratio.
Property-Liability
Three months ended December 31,
 
Twelve months ended December 31,
 
2018
 
2017
 
2018
 
2017
Combined ratio
97.0

 
91.0

 
93.6

 
93.6

Effect of catastrophe losses
(11.4
)
 
(7.5
)
 
(8.7
)
 
(10.3
)
Effect of prior year non-catastrophe reserve reestimates
1.2

 
2.2

 
0.9

 
1.6

Effect of amortization of purchased intangible assets
—

 
—

 
—

 
—

Underlying combined ratio*
86.8

 
85.7

 
85.8

 
84.9

 
 
 
 
 
 
 
 
Effect of prior year catastrophe reserve reestimates
(0.2
)
 
(0.1
)
 
0.1

 
—

Allstate brand - Total
Three months ended December 31,
 
Twelve months ended December 31,
 
2018
 
2017
 
2018
 
2017
Combined ratio
96.5

 
89.9

 
92.7

 
92.3

Effect of catastrophe losses
(12.3
)
 
(7.4
)
 
(9.0
)
 
(10.4
)
Effect of prior year non-catastrophe reserve reestimates
1.2

 
2.3

 
1.1

 
2.0

Underlying combined ratio*
85.4

 
84.8

 
84.8

 
83.9

 
 
 
 
 
 
 
 
Effect of prior year catastrophe reserve reestimates
(0.3
)
 
(0.1
)
 
—

 
—

Allstate brand - Auto Insurance
Three months ended December 31,
 
Twelve months ended December 31,
 
2018
 
2017
 
2018
 
2017
Combined ratio
92.9

 
91.9

 
91.9

 
93.2

Effect of catastrophe losses
(1.0
)
 
(0.7
)
 
(1.6
)
 
(3.4
)
Effect of prior year non-catastrophe reserve reestimates
1.7

 
3.0

 
1.9

 
2.4

Underlying combined ratio*
93.6

 
94.2

 
92.2

 
92.2

 
 
 
 
 
 
 
 
Effect of prior year catastrophe reserve reestimates
(0.1
)
 
—

 
(0.2
)
 
(0.1
)
Allstate brand - Homeowners Insurance
Three months ended December 31,
 
Twelve months ended December 31,
 
2018
 
2017
 
2018
 
2017
Combined ratio
105.7

 
85.4

 
93.3

 
89.4

Effect of catastrophe losses
(44.7
)
 
(27.8
)
 
(30.5
)
 
(30.7
)
Effect of prior year non-catastrophe reserve reestimates
0.9

 
2.3

 
0.7

 
1.8

Underlying combined ratio*
61.9

 
59.9

 
63.5

 
60.5

 
 
 
 
 
 
 
 
Effect of prior year catastrophe reserve reestimates
(1.1
)
 
(0.3
)
 
0.7

 
(0.1
)


12

Esurance brand - Total
Three months ended December 31,
 
Twelve months ended December 31,
 
2018
 
2017
 
2018
 
2017
Combined ratio
101.8

 
100.2

 
101.3

 
103.3

Effect of catastrophe losses
(1.2
)
 
(0.2
)
 
(2.8
)
 
(2.9
)
Effect of prior year non-catastrophe reserve reestimates
(0.6
)
 
—

 
(0.1
)
 
—

Effect of amortization of purchased intangible assets
(0.2
)
 
(0.2
)
 
(0.1
)
 
(0.2
)
Underlying combined ratio*
99.8

 
99.8

 
98.3

 
100.2

 
 
 
 
 
 
 
 
Effect of prior year catastrophe reserve reestimates
—

 
—

 
0.1

 
(0.1
)
Encompass brand - Total
Three months ended December 31,
 
Twelve months ended December 31,
 
2018
 
2017
 
2018
 
2017
Combined ratio
102.0

 
106.4

 
98.7

 
103.0

Effect of catastrophe losses
(3.9
)
 
(23.4
)
 
(10.0
)
 
(17.7
)
Effect of prior year non-catastrophe reserve reestimates
3.5

 
3.4

 
2.3

 
1.2

Underlying combined ratio*
101.6

 
86.4

 
91.0

 
86.5

 
 
 
 
 
 
 
 
Effect of prior year catastrophe reserve reestimates
—

 
(0.4
)
 
1.2

 
(0.1
)


# # # # #

13
allcorp123118investorsup
The Allstate Corporation Investor Supplement Fourth Quarter 2018 The consolidated financial statements and financial exhibits included herein are unaudited. These consolidated financial statements and exhibits should be read in conjunction with the consolidated financial statements and notes thereto included in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The results of operations for interim periods should not be considered indicative of results to be expected for the full year. Measures used in these financial statements and exhibits that are not based on generally accepted accounting principles ("non-GAAP") are denoted with an asterisk (*). These measures are defined on the page "Definitions of Non-GAAP Measures" and are reconciled to the most directly comparable generally accepted accounting principles ("GAAP") measure herein.

 
The Allstate Corporation Investor Supplement - Fourth Quarter 2018 Table of Contents Consolidated Operations Allstate Life Statements of Operations 1 Segment Results and Other Statistics 36 Contribution to Income 2 Analysis of Net Income 37 Revenues 3 Return on Equity 38 Segment Results 4,5 Reserves and Contractholder Funds 39 Condensed Statements of Financial Position 6 Book Value per Common Share 7 Allstate Benefits Return on Common Shareholders' Equity 8 Segment Results and Other Statistics 40 Debt to Capital 9 Segment Premium and Other Statistics 41 Statements of Cash Flows 10 Return on Equity 42 Analysis of Deferred Policy Acquisition Costs 11,12 Policies in Force 13 Allstate Annuities Premiums Written for Allstate Protection and Service Businesses 14 Segment Results and Other Statistics 43 Catastrophe Losses 15 Analysis of Net Income 44 Prior Year Reserve Reestimates 16 Return on Equity 45 Historical Loss Reserves 17 Reserves and Contractholder Funds 46 Property-Liability Corporate and Other Segment Results 47 Results 18 Underwriting Results by Area of Business 19 Investments Catastrophe Experience 20 Consolidated Investments 48 Property-Liability Prior Year Reserve Reestimates 21 Investments by Segment 49 Catastrophe Losses included in Prior Year Reserve Reestimates 22 Unrealized Net Capital Gains and Losses by Type 50 Allstate Protection Net Investment Income, Yields and Realized Capital Gains and Losses (Pre-tax) 51 Impact of Net Rate Changes Approved on Premiums Written 23 Net Investment Income, Yields and Realized Capital Gains and Losses (Pre-tax) by Segment 52,53 Allstate Brand Profitability Measures 24 Investment Position and Results by Strategy 54 Allstate Brand Statistics 25 Investment Position and Results by Strategy by Segment 55,56 Esurance Brand Profitability Measures and Statistics 26 Performance-Based Investments 57 Encompass Brand Profitability Measures and Statistics 27 Limited Partnership Interests 58 Auto Profitability Measures by Brand 28 Homeowners Profitability Measures by Brand 29 Definitions of Non-GAAP Measures 59,60 Other Personal Lines Profitability Measures by Brand 30 Commercial Lines Profitability Measures 31 Discontinued Lines and Coverages Reserves 32 Service Businesses Segment Results 33 SquareTrade Results 34 Other Service Businesses Segments Results 35

 
The Allstate Corporation Consolidated Statements of Operations ($ in millions, except per share data) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Revenues Property and casualty insurance premiums (1) $ 8,707 $ 8,595 $ 8,460 $ 8,286 $ 8,202 $ 8,121 $ 8,018 $ 7,959 $ 34,048 $ 32,300 Life premiums and contract charges (2) 625 612 612 616 601 593 591 593 2,465 2,378 Other revenue (3) 257 238 228 216 219 228 226 210 939 883 Net investment income 786 844 824 786 913 843 897 748 3,240 3,401 Realized capital gains and losses: Total other-than-temporary impairment ("OTTI") losses (5) (4) (4) - (11) (26) (47) (62) (13) (146) OTTI losses reclassified (from) to other comprehensive income 1 (1) - (1) (2) (2) (3) 3 (1) (4) Net OTTI losses recognized in earnings (4) (5) (4) (1) (13) (28) (50) (59) (14) (150) Sales and valuation changes on equity investments and derivatives (890) 181 (21) (133) 140 131 131 193 (863) 595 Total realized capital gains and losses (894) 176 (25) (134) 127 103 81 134 (877) 445 Total revenues 9,481 10,465 10,099 9,770 10,062 9,888 9,813 9,644 39,815 39,407 Costs and expenses Property and casualty insurance claims and claims expense 6,081 5,817 5,792 5,149 5,279 5,545 5,689 5,416 22,839 21,929 Life contract benefits 488 498 483 504 507 456 486 474 1,973 1,923 Interest credited to contractholder funds 165 163 165 161 168 174 175 173 654 690 Amortization of deferred policy acquisition costs 1,336 1,317 1,296 1,273 1,239 1,200 1,176 1,169 5,222 4,784 Operating costs and expenses 1,642 1,510 1,384 1,333 1,451 1,421 1,288 1,282 5,869 5,442 Amortization of purchased intangible assets 36 24 23 22 25 25 24 25 105 99 Restructuring and related charges 18 16 27 22 32 14 53 10 83 109 Goodwill impairment - - - - 125 - - - - 125 Interest expense 81 82 86 83 84 83 83 85 332 335 Total costs and expenses 9,847 9,427 9,256 8,547 8,910 8,918 8,974 8,634 37,077 35,436 Gain on disposition of operations 2 1 2 1 5 1 12 2 6 20 (Loss) Income from operations before income tax expense (364) 1,039 845 1,224 1,157 971 851 1,012 2,744 3,991 Income tax expense (benefit) (4) (95) (6) 169 (6) 169 249 (92) (6) 305 272 317 492 (6) 802 (6) Net (loss) income $ (269) $ 870 $ 676 $ 975 $ 1,249 $ 666 $ 579 $ 695 $ 2,252 $ 3,189 Preferred stock dividends 43 37 39 29 29 29 29 29 148 116 Net (loss) income applicable to common shareholders $ (312) $ 833 $ 637 $ 946 $ 1,220 $ 637 $ 550 $ 666 $ 2,104 $ 3,073 Earnings per common share: (5) Net (loss) income applicable to common shareholders per common share - Basic $ (0.91) $ 2.41 $ 1.82 $ 2.67 $ 3.41 $ 1.76 $ 1.51 $ 1.82 $ 6.05 $ 8.49 Weighted average common shares - Basic 341.9 346.0 349.2 354.1 357.5 361.3 363.6 365.7 347.8 362.0 Net (loss) income applicable to common shareholders per common share - Diluted $ (0.91) (7) $ 2.37 $ 1.80 $ 2.63 $ 3.35 $ 1.74 $ 1.49 $ 1.79 $ 5.96 $ 8.36 Weighted average common shares - Diluted 347.1 351.7 354.6 359.9 363.8 367.1 369.0 371.3 353.2 367.8 Cash dividends declared per common share $ 0.46 $ 0.46 $ 0.46 $ 0.46 $ 0.37 $ 0.37 $ 0.37 $ 0.37 $ 1.84 $ 1.48 (1) Property and casualty insurance premiums are reported in the Property-Liability and Service Businesses results and include auto, homeowners and other personal lines insurance products, as well as consumer product protection plans, roadside assistance, and finance and insurance products. (2) Life premiums and contract charges are reported in the Allstate Life, Allstate Benefits and Allstate Annuities results and include life insurance, voluntary accident and health insurance, and annuity products. (3) Other revenue primarily represents fees collected from policyholders relating to premium installment payments, commissions on sales of non-proprietary products, fee-based services and other revenue transactions. (4) On December 22, 2017, Public Law 115-97, known as the Tax Cuts and Jobs Act of 2017 (“Tax Legislation”) became effective, permanently reducing the U.S. corporate income tax rate from 35% to 21% beginning January 1, 2018. As a result, the corporate tax rate is not comparable between periods. (5) In accordance with GAAP, the quarter and year-to-date per share amounts are calculated discretely. Therefore, the sum of each quarter may not equal the year-to-date amount. (6) Includes a $2 million Tax Legislation expense for the quarter ended December 31, 2018, a $31 million benefit for the quarter ended September 30, 2018, and a $506 million benefit for the year ended December 31, 2017. (7) Calculation uses weighted average shares of 341.9 million which excludes weighted average diluted shares of 5.2 million due to a net loss reported for the three months ended December 31, 2018. The Allstate Corporation 4Q18 Supplement 1

 
The Allstate Corporation Contribution to Income ($ in millions, except per share data) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Contribution to income Net (loss) income applicable to common shareholders $ (312) $ 833 $ 637 $ 946 $ 1,220 $ 637 $ 550 $ 666 $ 2,104 $ 3,073 Realized capital gains and losses, after-tax 704 (141) 19 106 (90) (67) (53) (88) 688 (298) Valuation changes on embedded derivatives not hedged, after-tax 2 (1) - (4) (2) 1 1 - (3) - DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives not hedged, after-tax 1 1 3 2 2 2 3 3 7 10 Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax (1) - (1) - (1) (1) (1) - (2) (3) Business combination expenses and the amortization of purchased intangible assets, after-tax 35 20 18 17 17 17 16 29 90 79 Gain on disposition of operations, after-tax (1) (1) (1) (1) (3) (2) (6) (2) (4) (13) Goodwill impairment - - - - 125 - - - - 125 Tax Legislation expense (benefit) 2 (31) - - (506) - - - (29) (506) Adjusted net income * $ 430 $ 680 $ 675 $ 1,066 $ 762 $ 587 $ 510 $ 608 $ 2,851 $ 2,467 Income per common share - Diluted Net (loss) income applicable to common shareholders $ (0.91) $ 2.37 $ 1.80 $ 2.63 $ 3.35 $ 1.74 $ 1.49 $ 1.79 $ 5.96 $ 8.36 Realized capital gains and losses, after-tax 2.03 (0.40) 0.05 0.29 (0.25) (0.18) (0.14) (0.24) 1.95 (0.81) Valuation changes on embedded derivatives not hedged, after-tax 0.01 - - (0.01) (0.01) - - - (0.01) - DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives not hedged, after-tax - - - - 0.01 0.01 0.01 0.01 0.02 0.03 Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax - - - - - - - - (0.01) (0.01) Business combination expenses and the amortization of purchased intangible assets, after-tax 0.10 0.05 0.05 0.05 0.05 0.04 0.04 0.08 0.25 0.22 Gain on disposition of operations, after-tax - - - - (0.01) (0.01) (0.02) - (0.01) (0.04) Goodwill impairment - - - - 0.34 - - - - 0.34 Tax Legislation expense (benefit) 0.01 (0.09) - - (1.39) - - - (0.08) (1.38) Adjusted net income * $ 1.24 $ 1.93 $ 1.90 $ 2.96 $ 2.09 $ 1.60 $ 1.38 $ 1.64 $ 8.07 $ 6.71 Weighted average common shares - Diluted 347.1 351.7 354.6 359.9 363.8 367.1 369.0 371.3 353.2 367.8 The Allstate Corporation 4Q18 Supplement 2

 
The Allstate Corporation Revenues ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Property-Liability (1) Insurance premiums $ 8,422 $ 8,320 $ 8,189 $ 8,019 $ 7,971 $ 7,896 $ 7,807 $ 7,759 $ 32,950 $ 31,433 Other revenue (2) 188 192 184 174 170 185 181 167 738 703 Net investment income 364 410 353 337 415 368 387 308 1,464 1,478 Realized capital gains and losses (655) 126 (15) (95) 99 82 85 135 (639) 401 Total Property-Liability revenues 8,319 9,048 8,711 8,435 8,655 8,531 8,460 8,369 34,513 34,015 Service Businesses Insurance premiums 285 (4) 275 (4) 271 (4) 267 (4) 231 225 211 200 1,098 867 Intersegment insurance premiums and service fees (3) 33 31 29 29 28 26 28 28 122 110 Other revenue (2) 34 16 16 16 16 17 17 16 82 66 Net investment income 9 7 6 5 5 4 4 3 27 16 Realized capital gains and losses (5) - (2) (4) - - - - (11) - Total Service Businesses revenues 356 329 320 313 280 272 260 247 1,318 1,059 Allstate Life Premiums and contract charges 340 322 326 327 324 316 319 321 1,315 1,280 Other revenue (2) 35 30 28 26 33 26 28 27 119 114 Net investment income 125 128 130 122 127 119 123 120 505 489 Realized capital gains and losses (5) (3) (3) (3) 1 2 1 1 (14) 5 Total Allstate Life revenues 495 477 481 472 485 463 471 469 1,925 1,888 Allstate Benefits Premiums and contract charges 281 285 283 286 273 273 269 269 1,135 1,084 Net investment income 20 19 19 19 18 18 19 17 77 72 Realized capital gains and losses (9) 2 - (2) - 1 - - (9) 1 Total Allstate Benefits revenues 292 306 302 303 291 292 288 286 1,203 1,157 Allstate Annuities Contract charges 4 5 3 3 4 4 3 3 15 14 Net investment income 253 260 293 290 338 324 354 289 1,096 1,305 Realized capital gains and losses (194) 51 6 (29) 33 18 (5) (2) (166) 44 Total Allstate Annuities revenues 63 316 302 264 375 346 352 290 945 1,363 Corporate and Other Net investment income 15 20 23 13 10 10 10 11 71 41 Realized capital gains and losses (26) - (11) (1) (6) - - - (38) (6) Total Corporate and Other revenues (11) 20 12 12 4 10 10 11 33 35 Intersegment eliminations (3) (33) (31) (29) (29) (28) (26) (28) (28) (122) (110) Consolidated revenues $ 9,481 $ 10,465 $ 10,099 $ 9,770 $ 10,062 $ 9,888 $ 9,813 $ 9,644 $ 39,815 $ 39,407 (1) Allstate Protection and Discontinued Lines and Coverages segments comprise Property-Liability. (2) Other revenue primarily represents fees collected from policyholders relating to premium installment payments, commissions on sales of non-proprietary products, fee-based services and other revenue transactions. (3) Intersegment insurance premiums and service fees are primarily related to Arity and Allstate Roadside Services and are eliminated in the consolidated financial statements. (4) Includes $21 million, $24 million, $26 million and $30 million of net premiums earned recognized as a result of the adoption of the revenue from contracts with customers accounting standard in the fourth, third, second and first quarter of 2018, respectively, with a corresponding increase in amortization of deferred policy acquisition costs related to protection plans sold directly to retailers for which SquareTrade is deemed to be the principal in the transaction. The Allstate Corporation 4Q18 Supplement 3

 
The Allstate Corporation Consolidating Segment Results Allstate Discontinued Property- Service Allstate Allstate Allstate Corporate Intersegment ($ in millions) Protection Lines Liability Businesses Life Benefits Annuities and Other Eliminations Consolidated Three months ended December 31, 2018 Premiums and contract charges $ 8,422 $ - $ 8,422 $ 285 $ 340 $ 281 $ 4 $ - $ - $ 9,332 Intersegment insurance premiums and service fees - - - 33 - - - - (33) - Other revenue 188 - 188 34 35 - - - - 257 Claims and claims expense (6,002) (2) (6,004) (79) - - - - 2 (6,081) Contract benefits and interest credited to contractholder funds - - - - (288) (154) (211) - - (653) Amortization of deferred policy acquisition costs (1,144) - (1,144) (122) (26) (42) (2) - - (1,336) Operating costs and expenses (1,193) (2) (1,195) (149) (105) (73) (6) (145) 31 (1,642) Amortization of purchased intangible assets (3) (3) (33) - - - - - (36) Restructuring and related charges (15) - (15) (3) - - - - - (18) Interest expense - - - - - - - (81) - (81) Underwriting income (loss) $ 253 $ (4) 249 Net investment income 364 9 125 20 253 15 - 786 Realized capital gains and losses (655) (5) (5) (9) (194) (26) - (894) Gain on disposition of operations - - - - 2 - - 2 Income tax (expense) benefit 25 6 (14) (4) 31 51 - 95 Preferred stock dividends - - - - - (43) - (43) Net income (loss) applicable to common shareholders $ (17) $ (24) $ 62 $ 19 $ (123) $ (229) $ - $ (312) Realized capital gains and losses, after-tax 516 4 4 7 153 20 - 704 Valuation changes on embedded derivatives not hedged, after-tax - - - - 2 - - 2 DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives not hedged, after-tax - - 2 (1) - - - 1 Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax (1) - - - - - - (1) Business combination expenses and the amortization of purchased intangible assets, after-tax 2 26 - - - 7 - 35 Gain on disposition of operations, after-tax - - - - (1) - - (1) Tax Legislation expense (benefit) 2 - - - - - - 2 Adjusted net income (loss) * $ 502 $ 6 (1) $ 68 (1) $ 25 (1) $ 31 (1) $ (202) (1) $ - $ 430 Three months ended December 31, 2017 Premiums and contract charges $ 7,971 $ - $ 7,971 $ 231 $ 324 $ 273 $ 4 $ - $ - $ 8,803 Intersegment insurance premiums and service fees - - - 28 - - - - (28) - Other revenue 170 - 170 16 33 - - - - 219 Claims and claims expense (5,187) (3) (5,190) (90) - - - - 1 (5,279) Contract benefits and interest credited to contractholder funds - - - - (281) (152) (242) - - (675) Amortization of deferred policy acquisition costs (1,091) - (1,091) (79) (30) (37) (2) - - (1,239) Operating costs and expenses (1,124) (1) (1,125) (132) (98) (70) (9) (44) 27 (1,451) Amortization of purchased intangible assets (2) (2) (23) - - - - - (25) Goodwill impairment - - - - - - - (125) - (125) Restructuring and related charges (18) - (18) (11) (1) (2) - - - (32) Interest expense - - - - - - - (84) - (84) Underwriting income (loss) $ 719 $ (4) 715 Net investment income 415 5 127 18 338 10 - 913 Realized capital gains and losses 99 - 1 - 33 (6) - 127 Gain on disposition of operations 4 - - - 1 - - 5 Income tax (expense) benefit (466) 150 312 40 139 (83) - 92 Preferred stock dividends - - - - - (29) - (29) Net income (loss) applicable to common shareholders $ 767 $ 95 $ 387 $ 70 $ 262 $ (361) $ - $ 1,220 Realized capital gains and losses, after-tax (73) - - 1 (22) 4 - (90) Valuation changes on embedded derivatives not hedged, after-tax - - - - (2) - - (2) DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives not hedged, after-tax - - 2 - - - - 2 Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax (1) - - - - - - (1) Business combination expenses and the amortization of purchased intangible assets, after-tax 2 15 - - - - - 17 Gain on disposition of operations, after-tax (2) - - - (1) - - (3) Goodwill impairment - - - - - 125 - 125 Tax Legislation expense (benefit) 65 (134) (332) (51) (182) 128 - (506) Adjusted net income (loss) * $ 758 $ (24) (1) $ 57 (1) $ 20 (1) $ 55 (1) $ (104) (1) $ - $ 762 (1) Adjusted net income is the segment measure used for each business. The Allstate Corporation 4Q18 Supplement 4

 
The Allstate Corporation Consolidating Segment Results Allstate Discontinued Property- Service Allstate Allstate Allstate Corporate Intersegment ($ in millions) Protection Lines Liability Businesses Life Benefits Annuities and Other Eliminations Consolidated Twelve months ended December 31, 2018 Premiums and contract charges$ 32,950 $ - $ 32,950 $ 1,098 $ 1,315 $ 1,135 $ 15 $ - $ - $ 36,513 Intersegment insurance premiums and service fees - - - 122 - - - - (122) - Other revenue 738 - 738 82 119 - - - - 939 Claims and claims expense (22,408) (87) (22,495) (351) - - - - 7 (22,839) Contract benefits and interest credited to contractholder funds - - - - (1,094) (630) (903) - - (2,627) Amortization of deferred policy acquisition costs (4,475) - (4,475) (463) (132) (145) (7) - - (5,222) Operating costs and expenses (4,531) (3) (4,534) (511) (369) (285) (32) (253) 115 (5,869) Amortization of purchased intangible assets (11) - (11) (94) - - - - - (105) Restructuring and related charges (76) - (76) (4) (3) - - - - (83) Interest expense - - - - - - - (332) - (332) Underwriting income (loss) $ 2,187 $ (90) 2,097 Net investment income 1,464 27 505 77 1,096 71 - 3,240 Realized capital gains and losses (639) (11) (14) (9) (166) (38) - (877) Gain on disposition of operations - - - - 6 - - 6 Income tax (expense) benefit (581) 20 (73) (30) 66 106 - (492) Preferred stock dividends - - - - - (148) - (148) Net income (loss) applicable to common shareholders $ 2,341 $ (85) $ 254 $ 113 $ 75 $ (594) $ - $ 2,104 Realized capital gains and losses, after-tax 500 9 11 7 131 30 - 688 Valuation changes on embedded derivatives not hedged, after-tax - - - - (3) - - (3) DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives not hedged, after-tax - - 8 (1) - - - 7 Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax (2) - - - - - - (2) Business combination expenses and the amortization of purchased intangible assets, after-tax 9 74 - - - 7 - 90 Gain on disposition of operations, after-tax - - - - (4) - - (4) Tax Legislation expense (benefit) 5 4 16 - (69) 15 - (29) Adjusted net income (loss) * $ 2,853 $ 2 (1) $ 289 (1) $ 119 (1) $ 130 (1) $ (542) (1) $ - $ 2,851 Twelve months ended December 31, 2017 Premiums and contract charges$ 31,433 $ - $ 31,433 $ 867 $ 1,280 $ 1,084 $ 14 $ - $ - $ 34,678 Intersegment insurance premiums and service fees - - - 110 - - - - (110) - Other revenue 703 - 703 66 114 - - - - 883 Claims and claims expense (21,470) (96) (21,566) (369) - - - - 6 (21,929) Contract benefits and interest credited to contractholder funds - - - - (1,047) (599) (967) - - (2,613) Amortization of deferred policy acquisition costs (4,205) - (4,205) (296) (134) (142) (7) - - (4,784) Operating costs and expenses (4,251) (3) (4,254) (467) (352) (266) (35) (172) 104 (5,442) Amortization of purchased intangible assets (7) - (7) (92) - - - - - (99) Restructuring and related charges (91) - (91) (13) (2) (3) - - - (109) Goodwill impairment - - - - - - - (125) - (125) Interest expense (1) - (1) - - - - (334) - (335) Underwriting income (loss) $ 2,111 $ (99) 2,012 Net investment income 1,478 16 489 72 1,305 41 - 3,401 Realized capital gains and losses 401 - 5 1 44 (6) - 445 Gain on disposition of operations 14 - - - 6 - - 20 Income tax (expense) benefit (1,318) 193 224 (1) 58 42 - (802) Preferred stock dividends - - - - - (116) - (116) Net income (loss) applicable to common shareholders $ 2,587 $ 15 $ 577 $ 146 $ 418 $ (670) $ - $ 3,073 Realized capital gains and losses, after-tax (272) - (2) - (28) 4 - (298) Valuation changes on embedded derivatives not hedged, after-tax - - - - - - - - DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives not hedged, after-tax - - 10 - - - - 10 Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax (3) - - - - - - (3) Business combination expenses and the amortization of purchased intangible assets, after-tax 5 60 - - - 14 - 79 Gain on disposition of operations, after-tax (9) - - - (4) - - (13) Goodwill impairment - - - - - 125 - 125 Tax Legislation expense (benefit) 65 (134) (332) (51) (182) 128 (506) Adjusted net income (loss) * $ 2,373 $ (59) (1) $ 253 (1) $ 95 (1) $ 204 (1) $ (399) (1) $ - $ 2,467 (1) Adjusted net income is the segment measure used for each business. The Allstate Corporation 4Q18 Supplement 5

 
The Allstate Corporation Condensed Consolidated Statements of Financial Position ($ in millions) Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec 31, Sept. 30, June 30, March 31, Dec 31, 2018 2018 2018 2018 2017 2018 2018 2018 2018 2017 Assets Liabilities Investments Reserve for property and casualty insurance claims and Fixed income securities, at fair value claims expense $ 27,423 $ 26,939 $ 26,623 $ 26,115 $ 26,325 (amortized cost $57,134, $57,618, Reserve for life-contingent contract benefits 12,208 12,214 12,213 12,333 12,549 $56,750, $56,209, and $57,525) $ 57,170 $ 57,663 $ 56,891 $ 56,674 $ 58,992 Contractholder funds 18,371 18,650 18,888 19,139 19,434 Equity securities, at fair value Unearned premiums 14,510 14,408 13,824 13,448 13,473 (cost $4,489, $5,741, $5,846, Claim payments outstanding 1,007 904 894 865 875 $5,928 and $5,461) 5,036 6,965 6,888 6,986 6,621 Deferred income taxes 425 660 723 725 782 Mortgage loans 4,670 4,592 4,535 4,679 4,534 Other liabilities and accrued expenses 7,737 7,325 7,363 7,226 6,639 Limited partnership interests 7,505 7,602 7,679 7,434 6,740 Long-term debt 6,451 6,450 6,448 6,847 6,350 Short-term, at fair value Separate Accounts 2,805 3,307 3,271 3,314 3,444 (amortized cost $3,027, $3,071, Total liabilities 90,937 90,857 90,247 90,012 89,871 $3,123, $3,424 and $1,944) 3,027 3,071 3,123 3,424 1,944 Other 3,852 4,075 4,125 4,092 3,972 Equity Total investments 81,260 83,968 83,241 83,289 82,803 Preferred stock and additional capital paid-in (1) 1,930 2,303 2,303 2,303 1,746 Common stock, 332 million, 345 million, 347 million, 352 million and 355 million shares outstanding (2) 9 9 9 9 9 Cash 499 460 489 450 617 Additional capital paid-in 3,310 3,441 3,391 3,367 3,313 Premium installment receivables, net 6,154 6,196 5,953 5,856 5,786 Retained income 45,708 46,178 45,508 45,031 43,162 Deferred policy acquisition costs 4,784 4,667 4,533 4,409 4,191 Deferred ESOP expense (3) (3) (3) (3) (3) Reinsurance and indemnification Treasury stock, at cost (568 million, 555 million, 553 million, recoverables, net 9,565 8,994 8,910 8,916 8,921 548 million and 545 million shares) (28,085) (27,011) (26,818) (26,280) (25,982) Accrued investment income 600 616 589 576 569 Accumulated other comprehensive income: Property and equipment, net 1,045 1,032 1,040 1,060 1,072 Unrealized net capital gains and losses (2) (16) 54 187 1,662 Goodwill 2,530 2,189 2,189 2,189 2,181 Unrealized foreign currency translation adjustments (64) (34) (20) (13) (9) Other assets 3,007 3,061 3,154 3,230 2,838 Unrecognized pension and other postretirement benefit cost (1,491) (1,234) (1,302) (1,324) (1,347) Separate Accounts 2,805 3,307 3,271 3,314 3,444 Total accumulated other comprehensive (loss) income (1,557) (1,284) (1,268) (1,150) 306 Total shareholders' equity 21,312 23,633 23,122 23,277 22,551 Total assets $ 112,249 $ 114,490 $ 113,369 $ 113,289 $ 112,422 Total liabilities and shareholders' equity $ 112,249 $ 114,490 $ 113,369 $ 113,289 $ 112,422 (1) Preferred shares outstanding were 79.8 thousand at December 31, 2018, 95.2 thousand at September 30, 2018, June 30, 2018 and March 31, 2018 and 72.2 thousand at December 31, 2017. (2) Common shares outstanding were 331,908,805, 344,950,779; 346,600,485; 352,133,515 and 354,690,536 as of December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018 and December 31, 2017, respectively. The Allstate Corporation 4Q18 Supplement 6

 
The Allstate Corporation Book Value per Common Share ($ in millions, except per share data) Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, 2018 2018 2018 2018 2017 2017 2017 2017 Book value per common share Numerator: (1) Common shareholders' equity $ 19,382 $ 21,330 $ 20,819 $ 20,974 $ 20,805 $ 20,373 $ 19,755 $ 19,412 Denominator: Common shares outstanding and dilutive potential common shares outstanding 336.7 350.9 351.9 357.7 361.3 365.8 367.0 370.4 Book value per common share $ 57.56 $ 60.79 $ 59.16 $ 58.64 $ 57.58 $ 55.69 $ 53.83 $ 52.41 Book value per common share, excluding the impact of unrealized net capital gains and losses on fixed income securities Numerator: Common shareholders' equity $ 19,382 $ 21,330 $ 20,819 $ 20,974 $ 20,805 $ 20,373 $ 19,755 $ 19,412 Less: Unrealized net capital gains and losses on fixed income securities - (15) 55 187 757 1,028 1,013 831 Adjusted common shareholders' equity $ 19,382 $ 21,345 $ 20,764 $ 20,787 $ 20,048 $ 19,345 $ 18,742 $ 18,581 Denominator: Common shares outstanding and dilutive potential common shares outstanding 336.7 350.9 351.9 357.7 361.3 365.8 367.0 370.4 Book value per common share, excluding the impact of unrealized net capital gains and losses on fixed income securities * $ 57.56 $ 60.83 $ 59.01 $ 58.11 $ 55.49 $ 52.88 $ 51.07 $ 50.16 (1) Excludes equity related to preferred stock of $1,930 million at December 31, 2018, $2,303 million at September 30, 2018, June 30, 2018 and March 31, 2018 and $1,746 million at December 31, 2017. The Allstate Corporation 4Q18 Supplement 7

 
The Allstate Corporation Return on Common Shareholders' Equity ($ in millions) Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, 2018 2018 2018 2018 2017 2017 2017 2017 Return on Common Shareholders' Equity Numerator: (1) Net income applicable to common shareholders $ 2,104 (4) $ 3,636 (4) $ 3,440 (4) $ 3,353 (4) $ 3,073 (4) $ 2,664 $ 2,518 $ 2,210 Denominator: Beginning common shareholders' equity (2) $ 20,805 $ 20,373 $ 19,755 $ 19,412 $ 18,827 $ 19,188 $ 18,807 $ 18,594 Ending common shareholders' equity (2) 19,382 21,330 20,819 20,974 20,805 20,373 19,755 19,412 (3) Average common shareholders' equity $ 20,094 $ 20,852 $ 20,287 $ 20,193 $ 19,816 $ 19,781 $ 19,281 $ 19,003 Return on common shareholders' equity 10.5 % 17.4 % 17.0 % 16.6 % 15.5 % 13.5 % 13.1 % 11.6 % Adjusted Net Income Return on Common Shareholders' Equity Numerator: (1) Adjusted net income * $ 2,851 $ 3,183 $ 3,090 $ 2,925 $ 2,467 $ 2,512 $ 2,399 $ 2,124 Denominator: Beginning common shareholders' equity $ 20,805 $ 20,373 $ 19,755 $ 19,412 $ 18,827 $ 19,188 $ 18,807 $ 18,594 Less: Unrealized net capital gains and losses 1,662 1,651 1,526 1,256 1,053 1,817 1,624 1,200 Adjusted beginning common shareholders' equity 19,143 18,722 18,229 18,156 17,774 17,371 17,183 17,394 Ending common shareholders' equity 19,382 21,330 20,819 20,974 20,805 20,373 19,755 19,412 Less: Unrealized net capital gains and losses (2) (16) 54 187 1,662 1,651 1,526 1,256 Adjusted ending common shareholders' equity 19,384 21,346 20,765 20,787 19,143 18,722 18,229 18,156 (3) Average adjusted common shareholders' equity $ 19,264 $ 20,034 $ 19,497 $ 19,472 $ 18,459 $ 18,047 $ 17,706 $ 17,775 Adjusted net income return on common shareholders' equity * 14.8 % 15.9 % 15.8 % 15.0 % 13.4 % 13.9 % 13.5 % 11.9 % (1) Net income applicable to common shareholders and adjusted net income reflect a trailing twelve-month period. (2) Excludes equity related to preferred stock of $1,930 million at December 31, 2018, $2,303 million at September 30, 2018, June 30, 2018 and March 31, 2018, and $1,746 million for all other periods presented. (3) Average common shareholders' equity and average adjusted common shareholders' equity are determined using a two-point average, with the beginning and ending common shareholders' equity and adjusted common shareholders' equity, respectively, for the twelve-month period as data points. (4) Includes a $29 million Tax Legislation benefit for the period ended December 31, 2018, $537 million benefit for the period ended September 30, 2018, and a $506 million benefit for the periods ended June 30, 2018, March 31, 2018 and December 31, 2017. The Allstate Corporation 4Q18 Supplement 8

 
The Allstate Corporation Debt to Capital ($ in millions) Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, 2018 2018 2018 2018 2017 2017 2017 2017 Debt Short-term debt $ - $ - $ - $ - $ - $ - $ - $ - Long-term debt 6,451 6,450 6,448 6,847 6,350 6,349 6,348 6,346 Total debt $ 6,451 $ 6,450 $ 6,448 $ 6,847 $ 6,350 $ 6,349 $ 6,348 $ 6,346 Capital resources Debt $ 6,451 $ 6,450 $ 6,448 $ 6,847 $ 6,350 $ 6,349 $ 6,348 $ 6,346 Shareholders' equity Preferred stock and additional capital paid-in 1,930 2,303 2,303 2,303 1,746 1,746 1,746 1,746 Common stock 9 9 9 9 9 9 9 9 Additional capital paid-in 3,310 3,441 3,391 3,367 3,313 3,330 3,269 3,285 Retained income 45,708 46,178 45,508 45,031 43,162 42,125 41,622 41,208 Deferred ESOP expense (3) (3) (3) (3) (3) (6) (6) (6) Treasury stock (28,085) (27,011) (26,818) (26,280) (25,982) (25,413) (25,241) (24,887) Unrealized net capital gains and losses (2) (16) 54 187 1,662 1,651 1,526 1,256 Unrealized foreign currency translation adjustments (64) (34) (20) (13) (9) (14) (42) (53) Unrecognized pension and other postretirement benefit cost (1,491) (1,234) (1,302) (1,324) (1,347) (1,309) (1,382) (1,400) Total shareholders' equity 21,312 23,633 23,122 23,277 22,551 22,119 21,501 21,158 Total capital resources $ 27,763 $ 30,083 $ 29,570 $ 30,124 $ 28,901 $ 28,468 $ 27,849 $ 27,504 Ratio of debt to shareholders' equity 30.3 % 27.3 % 27.9 % 29.4 % 28.2 % 28.7 % 29.5 % 30.0 % Ratio of debt to capital resources 23.2 % 21.4 % 21.8 % 22.7 % 22.0 % 22.3 % 22.8 % 23.1 % The Allstate Corporation 4Q18 Supplement 9

 
The Allstate Corporation Consolidated Statements of Cash Flows ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Cash flows from operating activities Net income $ (269) $ 870 $ 676 $ 975 $ 1,249 $ 666 $ 579 $ 695 $ 2,252 $ 3,189 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization and other non-cash items 135 128 126 122 125 120 119 119 511 483 Realized capital gains and losses 894 (176) 25 134 (127) (103) (81) (134) 877 (445) Gain on disposition of operations (2) (1) (2) (1) (5) (1) (12) (2) (6) (20) Interest credited to contractholder funds 165 163 165 161 168 174 175 173 654 690 Goodwill impairment - - - - 125 - - - - 125 Changes in: Policy benefits and other insurance reserves 344 112 342 (364) (974) 1,048 45 183 434 302 Unearned premiums 130 574 415 (204) (62) 491 282 (248) 915 463 Deferred policy acquisition costs (93) (123) (90) 10 (38) (111) (79) 14 (296) (214) Premium installment receivables, net 26 (237) (127) (58) 136 (216) (32) (19) (396) (131) Reinsurance recoverables, net (518) (94) 3 (12) 806 (1,023) (5) 11 (621) (211) Income taxes (129) 30 (438) 181 (364) 161 (326) 284 (356) (245) Other operating assets and liabilities 674 482 369 (318) 61 660 (174) (219) 1,207 328 Net cash provided by operating activities 1,357 1,728 1,464 626 1,100 1,866 491 857 5,175 4,314 Cash flows from investing activities Proceeds from sales Fixed income securities 6,960 6,708 8,896 10,619 5,833 4,987 7,438 7,083 33,183 25,341 Equity securities 2,222 1,061 2,438 1,138 1,325 1,749 829 2,601 6,859 6,504 Limited partnership interests 274 308 129 53 358 286 271 210 764 1,125 Other investments 319 99 59 76 104 52 94 24 553 274 Investment collections Fixed income securities 1,078 946 859 583 1,156 975 1,034 1,029 3,466 4,194 Mortgage loans 151 63 269 46 123 172 82 223 529 600 Other investments 118 135 113 122 184 121 163 174 488 642 Investment purchases Fixed income securities (7,911) (8,648) (10,612) (9,789) (7,210) (6,721) (8,414) (8,800) (36,960) (31,145) Equity securities (1,145) (890) (2,366) (1,535) (1,289) (1,823) (1,090) (2,383) (5,936) (6,585) Limited partnership interests (362) (444) (458) (415) (358) (504) (310) (268) (1,679) (1,440) Mortgage loans (229) (119) (124) (192) (335) (163) (62) (86) (664) (646) Other investments (198) (151) (205) (330) (299) (168) (313) (219) (884) (999) Change in short-term investments, net 160 (153) 1,021 (1,533) 353 115 570 1,572 (505) 2,610 Change in other investments, net (70) 7 (8) (27) (2) (135) 117 (10) (98) (30) Purchases of property and equipment, net (82) (67) (66) (62) (83) (70) (72) (74) (277) (299) Acquisition of operations (548) - (5) (5) - - - (1,356) (558) (1,356) Net cash provided by (used in) investing activities 737 (1,145) (60) (1,251) (140) (1,127) 337 (280) (1,719) (1,210) Cash flows from financing activities Proceeds from issuance of long-term debt - - - 498 - - - - 498 - Redemption and repayment of long-term debt 1 - (401) - - - - - (400) - Redemption of preferred stock (385) - - - - - - - (385) - Proceeds from issuance of preferred stock - - (1) (1) 558 - - - - 557 - Contractholder fund deposits 254 250 253 253 258 252 258 257 1,010 1,025 Contractholder fund withdrawals (493) (477) (505) (492) (474) (459) (474) (483) (1,967) (1,890) Dividends paid on common stock (159) (160) (163) (132) (134) (134) (135) (122) (614) (525) Dividends paid on preferred stock (37) (39) (29) (29) (29) (29) (29) (29) (134) (116) Treasury stock purchases (1,241) (224) (568) (270) (647) (191) (393) (264) (2,303) (1,495) Shares reissued under equity incentive plans, net 7 38 18 10 3 24 41 67 73 135 Other (2) - 31 62 (10) 6 (56) 3 91 (57) Net cash (used in) provided by financing activities (2,055) (612) (1,365) 458 (1,033) (531) (788) (571) (3,574) (2,923) Net increase (decrease) in cash 39 (29) 39 (167) (73) 208 40 6 (118) 181 Cash at beginning of period 460 489 450 617 690 482 442 436 617 436 Cash at end of period $ 499 $ 460 $ 489 $ 450 $ 617 $ 690 $ 482 $ 442 $ 499 $ 617 (1) Represents payment of issuance costs for March 29, 2018 preferred stock issuance. The Allstate Corporation 4Q18 Supplement 10

 
The Allstate Corporation Analysis of Deferred Policy Acquisition Costs ($ in millions) Change in Deferred Policy Acquisition Costs For the three months ended December 31, 2018 Amortization relating to realized capital gains and Amortization losses and (acceleration) Effect of Beginning Acquisition Amortization valuation changes on deceleration unrealized Ending balance costs before embedded derivatives for changes in capital gains balance Sept. 30, 2018 deferred adjustments (1)(2) not hedged (2) assumptions (2) and losses Dec. 31, 2018 Allstate Protection $ 1,624 $ 1,138 $ (1,144) $ - $ - $ - $ 1,618 Service Businesses 1,196 216 (122) - - - 1,290 Allstate Life Traditional life and accident and health 481 18 (10) - - - 489 Interest-sensitive life 783 17 (14) (2) - 27 811 Subtotal 1,264 35 (24) (2) - 27 1,300 Allstate Benefits Traditional life and accident and health 412 33 (37) - - - 408 Interest-sensitive life 143 3 (6) 1 - - 141 Subtotal 555 36 (43) 1 - - 549 Allstate Annuities Fixed annuity 28 - (2) - - - 27 Consolidated $ 4,667 $ 1,425 $ (1,335) $ (1) $ - $ 27 $ 4,784 Change in Deferred Policy Acquisition Costs For the three months ended December 31, 2017 Amortization relating to realized capital gains and Amortization losses and (acceleration) Effect of Beginning Acquisition Amortization valuation changes on deceleration unrealized Ending balance costs before embedded derivatives for changes in capital gains balance Sept. 30, 2017 deferred adjustments (1)(2) not hedged (2) assumptions (2) and losses Dec. 31, 2017 Allstate Protection $ 1,511 $ 1,090 $ (1,091) $ - $ - $ - $ 1,510 Service Businesses 921 112 (79) - - - 954 Allstate Life Traditional life and accident and health 458 17 (10) - - - 465 Interest-sensitive life 684 17 (18) (2) - 6 687 Subtotal 1,142 34 (28) (2) - 6 1,152 Allstate Benefits Traditional life and accident and health 399 35 (31) - - - 403 Interest-sensitive life 139 6 (6) - - - 139 Subtotal 538 41 (37) - - - 542 Allstate Annuities Fixed annuity 35 - (2) - - - 33 Consolidated $ 4,147 $ 1,277 $ (1,237) $ (2) $ - $ 6 $ 4,191 (1) Amortization before adjustments reflects total DAC amortization before amortization/accretion related to realized capital gains and losses and valuation changes on embedded derivatives not hedged and amortization acceleration/deceleration for changes in assumptions. (2) Included as a component of amortization of DAC on the Consolidated Statements of Operations. The Allstate Corporation 4Q18 Supplement 11

 
The Allstate Corporation Analysis of Deferred Policy Acquisition Costs ($ in millions) Change in Deferred Policy Acquisition Costs Reconciliation of Deferred Policy For the twelve months ended December 31, 2018 Acquisition Costs as of December 31, 2018 Amortization relating to realized capital gains and Amortization DAC before DAC after losses and (acceleration) Effect of impact of Impact of impact of Beginning Acquisition Amortization valuation changes on deceleration unrealized Ending unrealized unrealized unrealized balance costs before embedded derivatives for changes in capital gains balance capital gains capital gains capital gains Dec. 31, 2017 deferred adjustments (1)(2) not hedged (2) assumptions (2) and losses Dec. 31, 2018 and losses and losses and losses Allstate Protection $ 1,510 $ 4,583 $ (4,475) $ - $ - $ - $ 1,618 $ 1,618 $ - $ 1,618 Service Businesses 954 799 (3) (463) (3) - - - 1,290 1,290 - 1,290 Allstate Life Traditional life and accident and health 465 65 (41) - - - 489 489 - 489 Interest-sensitive life 687 65 (76) (10) (5) 150 811 846 (35) 811 Subtotal 1,152 130 (117) (10) (5) 150 1,300 1,335 (35) 1,300 Allstate Benefits Traditional life and accident and health 403 132 (127) - - - 408 408 - 408 Interest-sensitive life 139 18 (23) 1 4 2 141 140 1 141 Subtotal 542 150 (150) 1 4 2 549 548 1 549 Allstate Annuities Fixed annuity 33 - (7) - - - 27 27 - 27 Consolidated $ 4,191 $ 5,662 $ (5,212) $ (9) $ (1) $ 152 $ 4,784 $ 4,818 $ (34) $ 4,784 Change in Deferred Policy Acquisition Costs Reconciliation of Deferred Policy For the twelve months ended December 31, 2017 Acquisition Costs as of December 31, 2017 Amortization relating to realized capital gains and Amortization DAC before DAC after losses and (acceleration) Effect of impact of Impact of impact of Beginning Acquisition Amortization valuation changes on deceleration unrealized Ending unrealized unrealized unrealized balance costs before embedded derivatives for changes in capital gains balance capital gains capital gains capital gains Dec. 31, 2016 deferred adjustments (1)(2) not hedged (2) assumptions (2) and losses Dec. 31, 2017 and losses and losses and losses Allstate Protection $ 1,432 $ 4,283 $ (4,205) $ - $ - $ - $ 1,510 $ 1,510 $ - $ 1,510 Service Businesses 756 494 (4) (296) - - - 954 954 - 954 Allstate Life Traditional life and accident and health 438 66 (39) - - - 465 465 - 465 Interest-sensitive life 762 66 (95) (14) 14 (46) 687 872 (185) 687 Subtotal 1,200 132 (134) (14) 14 (46) 1,152 1,337 (185) 1,152 Allstate Benefits Traditional life and accident and health 382 138 (117) - - - 403 403 - 403 Interest-sensitive life 144 20 (24) - (1) - 139 140 (1) 139 Subtotal 526 158 (141) - (1) - 542 543 (1) 542 Allstate Annuities Fixed annuity 40 - (7) - - - 33 - 33 - 33 Consolidated $ 3,954 $ 5,067 $ (4,783) $ (14) $ 13 $ (46) $ 4,191 $ 4,377 $ (186) $ 4,191 (1) Amortization before adjustments reflects total DAC amortization before amortization/accretion related to realized capital gains and losses and valuation changes on embedded derivatives not hedged and amortization acceleration/deceleration for changes in assumptions. (2) Included as a component of amortization of DAC on the Consolidated Statements of Operations. (3) At adoption of the revenue from contracts with customers accounting standard, SquareTrade recorded an increase of approximately $160 million in acquisition costs deferred and $101 million of amortization before adjustments related to protection plans sold directly to retailers for which SquareTrade is deemed to be the principal in the transaction. (4) Includes $66 million recorded in connection with the SquareTrade acquisition on January 3, 2017. The Allstate Corporation 4Q18 Supplement 12

 
The Allstate Corporation Policies in Force and Other Statistics Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Policies In Force statistics (in thousands) (1) 2018 2018 2018 2018 2017 2017 2017 2017 Allstate Protection Allstate brand Auto 20,104 19,912 19,810 19,617 19,580 19,513 19,548 19,565 Homeowners 6,186 6,145 6,121 6,093 6,088 6,071 6,075 6,090 Landlord 681 683 688 692 694 697 703 710 Renter 1,642 1,626 1,612 1,599 1,588 1,578 1,564 1,563 Condominium 668 665 664 663 663 662 662 663 Other 1,304 1,297 1,287 1,276 1,278 1,275 1,270 1,264 Other personal lines 4,295 4,271 4,251 4,230 4,223 4,212 4,199 4,200 Commercial lines 231 231 234 238 245 251 262 272 Total 30,816 30,559 30,416 30,178 30,136 30,047 30,084 30,127 Esurance brand Auto 1,488 1,463 1,432 1,399 1,352 1,369 1,388 1,400 Homeowners 95 92 88 84 79 76 69 63 Other personal lines 46 46 46 45 44 45 47 48 Total 1,629 1,601 1,566 1,528 1,475 1,490 1,504 1,511 Encompass brand Auto 502 504 507 517 530 548 571 595 Homeowners 239 240 243 248 254 262 273 284 Other personal lines 78 80 81 83 85 88 91 94 Total 819 824 831 848 869 898 935 973 Allstate Protection Policies in Force 33,264 32,984 32,813 32,554 32,480 32,435 32,523 32,611 Service Businesses SquareTrade 68,588 52,151 44,459 41,806 38,719 34,078 31,258 29,907 InfoArmor 1,040 - - - - - - - Allstate Roadside Services 663 671 681 692 699 708 724 743 Allstate Dealer Services 3,896 3,919 3,959 4,026 4,088 4,130 4,139 4,150 Total 74,187 56,741 49,099 46,524 43,506 38,916 36,121 34,800 Allstate Life 2,022 2,018 2,019 2,018 2,026 2,019 2,020 2,017 Allstate Benefits 4,208 4,241 4,283 4,260 4,033 4,035 4,064 3,992 Allstate Annuities 211 215 220 225 231 236 240 246 Total Policies in Force 113,892 96,199 88,434 85,581 82,276 77,641 74,968 73,666 Agency Data (2) (3) Total Allstate agencies 12,700 12,400 12,300 12,300 12,400 12,200 12,200 12,200 (4) Licensed sales professionals 26,900 25,600 25,200 24,700 24,800 23,900 24,000 23,600 (5) Allstate independent agencies 2,700 2,600 2,600 2,500 2,400 2,400 2,300 2,200 (1) Policy counts are based on items rather than customers. • A multi-car customer would generate multiple item (policy) counts, even if all cars were insured under one policy. • Commercial lines PIF for the agreement with a transportation network company reflects corporate contracts as opposed to individual driver counts. • Non-proprietary products offered by Ivantage (insurance agency) and Answer Financial (independent insurance agency) are not included. • Allstate Roadside Services reflects memberships in force and do not include their wholesale partners as the customer relationship is managed by the wholesale partner. • Allstate Dealer Services reflects service contracts and other products sold in conjunction with auto lending and vehicle sales transactions and do not include their third party administrators ("TPAs") as the customer relationship is managed by the TPAs. • SquareTrade represents active consumer product protection plans. • InfoArmor reflects individual customer counts for identity protection products. • Allstate Life insurance policies and Allstate Annuities in force reflect the number of contracts in force excluding sold blocks of business that remain on the balance sheet due to the dispositions of the business being effected through reinsurance arrangements. • Allstate Benefits reflects certificate counts as opposed to group counts. (2) Rounded to the nearest hundred. (3) Total Allstate agencies represents exclusive Allstate agencies and financial representatives in the United States and employee producers in Canada. (4) Represents employees of Allstate agencies who are licensed to sell Allstate products. (5) Includes 919 and 703 engaged Allstate independent agencies (“AIAs”) as of December 31, 2018 and December 31, 2017, respectively. Engaged AIAs, as currently determined, include those that achieve a minimum number of new policies written. The Allstate Corporation 4Q18 Supplement 13

 
The Allstate Corporation Premiums Written for Allstate Protection and Service Businesses ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Allstate Protection Allstate brand (1) Auto $ 5,272 $ 5,357 $ 5,211 $ 5,151 $ 4,956 $ 5,096 $ 4,925 $ 4,882 $ 20,991 $ 19,859 Homeowners 1,777 2,008 1,949 1,465 1,694 1,921 1,847 1,403 7,199 6,865 Landlord 133 139 131 121 132 138 130 120 524 520 Renter 70 86 77 69 68 86 75 67 302 296 Condominium 68 73 72 59 65 71 68 55 272 259 Other 149 174 195 126 145 159 168 126 644 598 Other personal lines 420 472 475 375 410 454 441 368 1,742 1,673 Commercial lines 177 173 172 137 125 116 124 123 659 488 Total 7,646 8,010 7,807 7,128 7,185 7,587 7,337 6,776 30,591 28,885 Esurance brand Auto 452 487 430 470 389 427 386 439 1,839 1,641 Homeowners 23 30 27 21 19 24 20 16 101 79 Other personal lines 2 2 2 2 2 2 2 2 8 8 Total 477 519 459 493 410 453 408 457 1,948 1,728 Encompass brand Auto 130 143 146 118 128 141 148 125 537 542 Homeowners 98 106 108 86 95 108 112 91 398 406 Other personal lines 19 22 21 19 20 22 25 20 81 87 Total 247 271 275 223 243 271 285 236 1,016 1,035 Total Allstate Protection Auto 5,854 5,987 5,787 5,739 5,473 5,664 5,459 5,446 23,367 22,042 Homeowners 1,898 2,144 2,084 1,572 1,808 2,053 1,979 1,510 7,698 7,350 Other personal lines 441 496 498 396 432 478 468 390 1,831 1,768 Commercial lines 177 173 172 137 125 116 124 123 659 488 Total 8,370 8,800 8,541 7,844 7,838 8,311 8,030 7,469 33,555 31,648 Discontinued Lines and Coverages - - - - - - - - - - Total Property-Liability $ 8,370 $ 8,800 $ 8,541 $ 7,844 $ 7,838 $ 8,311 $ 8,030 $ 7,469 $ 33,555 $ 31,648 Service Businesses (2) SquareTrade $ 323 $ 194 $ 126 $ 130 $ 156 $ 104 $ 85 $ 81 $ 773 $ 426 Allstate Roadside Services 61 65 68 65 60 68 66 69 259 263 Allstate Dealer Services 105 99 103 92 93 100 108 104 399 405 Total $ 489 $ 358 $ 297 $ 287 $ 309 $ 272 $ 259 $ 254 $ 1,431 $ 1,094 Total premiums written $ 8,859 $ 9,158 $ 8,838 $ 8,131 $ 8,147 $ 8,583 $ 8,289 $ 7,723 $ 34,986 $ 32,742 Non-Proprietary Premiums Ivantage (3) $ 1,780 $ 1,758 $ 1,719 $ 1,679 $ 1,643 $ 1,609 $ 1,584 $ 1,566 $ 1,780 $ 1,643 Answer Financial (4) 140 156 156 148 137 153 148 153 600 591 (1) Canada premiums included in Allstate brand Auto $ 220 $ 244 $ 245 $ 186 $ 196 $ 236 $ 228 $ 171 $ 895 $ 831 Homeowners 68 77 77 50 59 69 65 44 272 237 Other personal lines 23 25 29 14 15 19 16 12 91 62 Total $ 311 $ 346 $ 351 $ 250 $ 270 $ 324 $ 309 $ 227 $ 1,258 $ 1,130 (2) There are no premiums written for Arity or InfoArmor, which are part of the Service Businesses segment. (3) Represents non-proprietary premiums under management as of the end of the period related to personal and commercial line products offered by Ivantage when an Allstate product is not available. Fees for the three and twelve months ended December 31, 2018 were $39.3 million and $165.2 million, respectively. (4) Represents non-proprietary premiums written for the period. Commissions earned for the three and twelve months ended December 31, 2018 were $16.7 million and $70.5 million, respectively. The Allstate Corporation 4Q18 Supplement 14

 
The Allstate Corporation Catastrophe Losses ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Allstate Protection Allstate brand Auto $ 53 $ 113 $ 160 $ (1) $ 33 $ 366 $ 208 $ 65 $ 325 $ 672 Homeowners 798 (2) 418 627 300 480 383 650 575 2,143 2,088 Other personal lines 87 51 46 27 20 65 57 59 211 201 Commercial lines 9 6 4 3 2 13 2 7 22 24 Total 947 588 837 329 535 827 917 706 2,701 2,985 Esurance brand Auto 2 8 15 2 - 15 15 4 27 34 Homeowners 4 6 14 1 1 2 9 4 25 16 Total 6 14 29 3 1 17 24 8 52 50 Encompass brand Auto (1) 2 4 1 - 1 7 4 6 12 Homeowners 9 20 34 26 59 11 42 61 89 173 Other personal lines 2 1 2 2 3 - 3 2 7 8 Total 10 23 40 29 62 12 52 67 102 193 Total Allstate Protection Auto 54 123 179 2 33 382 230 73 358 718 Homeowners 811 444 675 327 540 396 701 640 2,257 2,277 Other personal lines 89 52 48 29 23 65 60 61 218 209 Commercial lines 9 6 4 3 2 13 2 7 22 24 Total 963 625 906 361 598 856 993 781 2,855 3,228 Discontinued Lines and Coverages - - - - - - - - - - Total Property-Liability $ 963 $ 625 $ 906 $ 361 $ 598 $ 856 $ 993 $ 781 $ 2,855 $ 3,228 Service Businesses (1) $ - $ - $ - $ - $ 1 $ 5 $ - $ - $ - $ 6 Total catastrophe losses $ 963 $ 625 $ 906 $ 361 $ 599 $ 861 $ 993 $ 781 $ 2,855 $ 3,234 (1) Catastrophe losses relate to Allstate Dealer Services. (2) Includes $60 million related reinsurance premiums that were required to be accelerated in conjunction with the reinstatement of certain coverage layers. The Allstate Corporation 4Q18 Supplement 15

 
The Allstate Corporation Prior Year Reserve Reestimates ($ in millions) Twelve months ended December 31, 2018 2017 2016 Prior Year Reserve Reestimates (1) Allstate brand $ (332) $ (585) $ (110) Esurance brand 3 (2) (21) Encompass brand (11) (14) 5 Allstate Protection (340) (601) (126) Discontinued Lines and Coverages 87 96 105 Total Property-Liability $ (253) $ (505) $ (21) Service Businesses $ (2) $ 2 $ 4 Total prior year reserve reestimates $ (255) $ (503) $ (17) Effect of Prior Year Reserve Reestimates on Combined Ratio (1)(2) Allstate brand (1.0) (1.9) (0.3) Esurance brand - - (0.1) Encompass brand - - - Allstate Protection (1.0) (1.9) (0.4) Discontinued Lines and Coverages 0.2 0.3 0.3 Total Property-Liability (0.8) (1.6) (0.1) Service Businesses - - - Total prior year reserve reestimates (0.8) (1.6) (0.1) (1) Favorable reserve reestimates are shown in parentheses. (2) Calculated using the total premiums earned for Allstate Protection, Discontinued Lines and Coverages and Service Businesses for the respective period. The Allstate Corporation 4Q18 Supplement 16

 
The Allstate Corporation Historical Loss Reserves ($ in millions) As of and for the twelve months ended December 31, 2018 2017 2016 2015 2014 (net of reinsurance) Net reserve for claims and claims expense, beginning of year $ 19,854 $ 19,066 $ 17,977 $ 17,229 $ 17,193 Acquisitions - 17 - - - Claims and claims expense Provision attributable to the current year 23,094 22,432 22,238 20,953 19,512 Change in provision attributable to prior years (1) (255) (503) (17) 81 (84) Total claims and claims expense 22,839 21,929 22,221 21,034 19,428 Payments Claims and claims expense attributable to current year (14,938) (14,194) (14,222) (13,660) (12,924) Claims and claims expense attributable to prior years (7,487) (6,964) (6,910) (6,626) (6,468) Total payments (22,425) (21,158) (21,132) (20,286) (19,392) (2) Net reserve for claims and claims expense, end of year $ 20,268 $ 19,854 $ 19,066 $ 17,977 $ 17,229 Percent change in loss reserves 2.1 % 4.1 % 6.1 % 4.3 % 0.2 % (1) Reserve reestimates due to: Asbestos and environmental claims $ 64 $ 71 $ 90 $ 40 $ 102 All other property and casualty claims (319) (574) (107) 41 (186) Change in pre-tax reserve $ (255) $ (503) $ (17) $ 81 $ (84) (2) Net reserves for claims and claims expense are net of expected reinsurance and indemnification recoveries of $7.16 billion, $6.47 billion, $6.18 billion, $5.89 billion and $5.69 billion at December 31, 2018, 2017, 2016, 2015, and 2014, respectively. The Allstate Corporation 4Q18 Supplement 17

 
The Allstate Corporation Property-Liability Results ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Premiums written $ 8,370 $ 8,800 $ 8,541 $ 7,844 $ 7,838 $ 8,311 $ 8,030 $ 7,469 $ 33,555 $ 31,648 Decrease (increase) in unearned premiums 99 (505) (347) 209 139 (456) (239) 298 (544) (258) Other (47) 25 (5) (34) (6) 41 16 (8) (61) 43 Premiums earned 8,422 8,320 8,189 8,019 7,971 7,896 7,807 7,759 32,950 31,433 Other revenue 188 192 184 174 170 185 181 167 738 703 Claims and claims expense (6,004) (5,729) (5,704) (5,058) (5,190) (5,441) (5,607) (5,328) (22,495) (21,566) Amortization of deferred policy acquisition costs (1,144) (1,133) (1,110) (1,088) (1,091) (1,060) (1,032) (1,022) (4,475) (4,205) Operating costs and expenses (1,198) (1,162) (1,118) (1,067) (1,127) (1,084) (1,033) (1,018) (4,545) (4,262) Restructuring and related charges (15) (15) (25) (21) (18) (12) (51) (10) (76) (91) Underwriting income 249 473 416 959 715 484 265 548 2,097 2,012 Net investment income 364 410 353 337 415 368 387 308 1,464 1,478 Income tax expense on operations (112) (178) (157) (268) (373) (271) (207) (268) (715) (1,119) Realized capital gains and losses, after-tax (516) 103 (12) (75) 73 54 56 89 (500) 272 Gain on disposition of operations, after-tax - - - - 2 1 6 - - 9 Tax Legislation expense (2) (3) - - (65) - - - (5) (65) Net (loss) income applicable to common shareholders $ (17) $ 805 $ 600 $ 953 $ 767 $ 636 $ 507 $ 677 $ 2,341 $ 2,587 Catastrophe losses $ 963 $ 625 $ 906 $ 361 $ 598 $ 856 $ 993 $ 781 $ 2,855 $ 3,228 Amortization of purchased intangible assets $ 3 $ 4 $ 3 $ 1 $ 2 $ 2 $ 1 $ 2 $ 11 $ 7 Operating ratios Claims and claims expense ("loss") ratio 71.3 68.8 69.6 63.0 65.1 68.9 71.8 68.6 68.2 68.6 Expense ratio (1) 25.7 25.5 25.3 25.0 25.9 25.0 24.8 24.3 25.4 25.0 Combined ratio 97.0 94.3 94.9 88.0 91.0 93.9 96.6 92.9 93.6 93.6 Loss ratio 71.3 68.8 69.6 63.0 65.1 68.9 71.8 68.6 68.2 68.6 Less: effect of catastrophe losses 11.4 7.5 11.1 4.5 7.5 10.9 12.7 10.1 8.7 10.3 effect of prior year non-catastrophe reserve reestimates (1.2) 0.1 (1.7) (0.7) (2.2) (1.6) (1.0) (1.3) (0.9) (1.6) Underlying loss ratio * 61.1 61.2 60.2 59.2 59.8 59.6 60.1 59.8 60.4 59.9 Reconciliation of combined ratio to underlying combined ratio Combined ratio 97.0 94.3 94.9 88.0 91.0 93.9 96.6 92.9 93.6 93.6 Effect of catastrophe losses (11.4) (7.5) (11.1) (4.5) (7.5) (10.9) (12.7) (10.1) (8.7) (10.3) Effect of prior year non-catastrophe reserve reestimates 1.2 (0.1) 1.7 0.7 2.2 1.6 1.0 1.3 0.9 1.6 Effect of amortization of purchased intangible assets - (0.1) - - - - - - - - Underlying combined ratio * 86.8 86.6 85.5 84.2 85.7 84.6 84.9 84.1 85.8 84.9 Effect of restructuring and related charges on combined ratio 0.2 0.2 0.3 0.3 0.2 0.2 0.7 0.1 0.2 0.3 Effect of Discontinued Lines and Coverages on combined ratio - 0.9 - - - 1.1 0.1 - 0.2 0.3 (1) Other revenue is deducted from other costs and expenses in the expense ratio calculation. The Allstate Corporation 4Q18 Supplement 18

 
The Allstate Corporation Property-Liability Underwriting Results by Area of Business ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Property-Liability Underwriting Summary Allstate Protection $ 253 $ 553 $ 419 $ 962 $ 719 $ 572 $ 270 $ 550 $ 2,187 $ 2,111 Discontinued Lines and Coverages (4) (80) (3) (3) (4) (88) (5) (2) (90) (99) Underwriting income $ 249 $ 473 $ 416 $ 959 $ 715 $ 484 $ 265 $ 548 $ 2,097 $ 2,012 Allstate Protection Underwriting Summary Premiums written $ 8,370 $ 8,800 $ 8,541 $ 7,844 $ 7,838 $ 8,311 $ 8,030 $ 7,469 $ 33,555 $ 31,648 Premiums earned $ 8,422 $ 8,320 $ 8,189 $ 8,019 $ 7,971 $ 7,896 $ 7,807 $ 7,759 $ 32,950 $ 31,433 Other revenue 188 192 184 174 170 185 181 167 738 703 Claims and claims expense (6,002) (5,649) (5,702) (5,055) (5,187) (5,353) (5,604) (5,326) (22,408) (21,470) Amortization of deferred policy acquisition costs (1,144) (1,133) (1,110) (1,088) (1,091) (1,060) (1,032) (1,022) (4,475) (4,205) Operating costs and expenses (1,196) (1,162) (1,117) (1,067) (1,126) (1,084) (1,031) (1,018) (4,542) (4,259) Restructuring and related charges (15) (15) (25) (21) (18) (12) (51) (10) (76) (91) Underwriting income $ 253 $ 553 $ 419 $ 962 $ 719 $ 572 $ 270 $ 550 $ 2,187 $ 2,111 Catastrophe losses $ 963 $ 625 $ 906 $ 361 $ 598 $ 856 $ 993 $ 781 $ 2,855 $ 3,228 Operating ratios Loss ratio 71.3 67.9 69.6 63.0 65.1 67.8 71.8 68.6 68.0 68.3 Expense ratio (1) 25.7 25.5 25.3 25.0 25.9 25.0 24.7 24.3 25.4 25.0 Combined ratio 97.0 93.4 94.9 88.0 91.0 92.8 96.5 92.9 93.4 93.3 Effect of catastrophe losses on combined ratio 11.4 7.5 11.1 4.5 7.5 10.9 12.7 10.1 8.7 10.3 Effect of restructuring and related charges on combined ratio 0.2 0.2 0.3 0.3 0.2 0.2 0.7 0.1 0.2 0.3 Effect of amortization of purchased intangible assets on combined ratio - 0.1 - - - - - - - - Discontinued Lines and Coverages Underwriting Summary Premiums written $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Premiums earned $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Claims and claims expense (2) (80) (2) (3) (3) (88) (3) (2) (87) (96) Operating costs and expenses (2) - (1) - (1) - (2) - (3) (3) Underwriting loss $ (4) $ (80) $ (3) $ (3) $ (4) $ (88) $ (5) $ (2) $ (90) $ (99) Effect of Discontinued Lines and Coverages on the Property-Liability combined ratio - 0.9 - - - 1.1 0.1 - 0.2 0.3 Allstate Protection Underwriting Income (Loss) by Brand Allstate brand $ 270 $ 554 $ 425 $ 957 $ 737 $ 562 $ 308 $ 594 $ 2,206 $ 2,201 Esurance brand (9) (10) (9) 3 (1) (19) (26) (10) (25) (56) Encompass brand (5) 10 4 4 (17) 29 (12) (33) 13 (33) Answer Financial (3) (1) (1) (2) - - - (1) (7) (1) Underwriting income $ 253 $ 553 $ 419 $ 962 $ 719 $ 572 $ 270 $ 550 $ 2,187 $ 2,111 (1) Other revenue is deducted from other costs and expenses in the expense ratio calculation. The Allstate Corporation 4Q18 Supplement 19

 
The Allstate Corporation Property-Liability Catastrophe Experience Catastrophe by Size of Event ($ in millions) Three months ended December 31, 2018 Average Number Claims and Combined catastrophe Size of catastrophe of events claims expense ratio impact loss per event Greater than $250 million 1 3.7 % $ 469 (1) 48.7 % 5.6 $ 469 $101 million to $250 million 2 7.4 325 (1) 33.7 3.8 163 $50 million to $100 million - - - - - - Less than $50 million 24 88.9 96 10.0 1.1 4 Total 27 100.0 % 890 92.4 10.5 33 Prior year reserve reestimates (20) (2.1) (0.2) Prior quarter reserve reestimates 93 9.7 1.1 (1) Total catastrophe losses $ 963 100.0 % 11.4 Twelve months ended December 31, 2018 Average Number Claims and Combined catastrophe Size of catastrophe of events claims expense ratio impact loss per event Greater than $250 million 1 0.8 % $ 469 (1) 16.4 % 1.4 $ 469 $101 million to $250 million 5 4.3 769 (1) 26.9 2.3 154 $50 million to $100 million 9 7.7 694 24.3 2.1 77 Less than $50 million 102 87.2 898 31.5 2.8 9 Total 117 100.0 % 2,830 99.1 8.6 24 Prior year reserve reestimates 25 0.9 0.1 (1) Total catastrophe losses $ 2,855 100.0 % 8.7 Effect of Catastrophe Losses on the Combined Ratio (2) Excludes the effect of catastrophe losses relating to earthquakes and hurricanes Premiums Total Total Effect on the Effect of all catastrophe losses on the combined ratio earned catastrophe catastrophe property and casualty Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year year-to-date losses by year losses by year combined ratio 2009 7.8 12.5 6.2 5.0 7.9 $ 26,194 $ 2,069 $ 2,159 8.2 2010 10.0 9.8 5.9 8.3 8.5 25,957 2,207 2,272 8.8 2011 5.2 36.2 16.7 1.0 14.7 25,942 3,815 3,298 12.7 2012 3.9 12.3 3.1 15.7 8.8 26,737 2,345 1,324 5.0 2013 5.3 9.4 1.8 1.7 4.5 27,618 1,251 1,352 4.9 2014 6.3 13.0 7.1 1.3 6.9 28,929 1,993 2,000 6.9 2015 4.0 10.6 3.5 4.7 5.7 30,309 1,719 1,749 5.8 2016 10.9 12.5 6.2 3.9 8.4 30,727 2,571 2,419 7.9 2017 10.1 12.7 10.9 7.5 10.3 31,433 3,228 2,611 8.3 2018 4.5 11.1 7.5 11.4 8.7 32,950 2,855 2,653 8.1 Average 6.8 14.0 6.9 6.1 8.4 7.7 (1) Estimated reinsurance recoveries for the California Camp Fire and Hurricane Michael were $517 million and $190 million, respectively. (2) Catastrophe losses and the effect on the combined ratio for 2016 - 2018 do not include Service Businesses. The periods 2009 through 2015 include historical Property-Liability results, which include Allstate Protection, Discontinued Lines and Coverages and Service Businesses. The effect on the combined ratio is calculated using total premiums earned. The Allstate Corporation 4Q18 Supplement 20

 
The Allstate Corporation Property-Liability Prior Year Reserve Reestimates ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Prior Year Reserve Reestimates (1) Allstate Protection Allstate brand Auto $ (94) $ (97) $ (155) $ (101) $ (149) (189) $ (61) $ (86) $ (447) $ (485) Homeowners (35) (17) 24 27 (45) (42) (17) (27) (1) (131) Other personal lines 12 8 (6) (6) 6 3 (3) 6 8 12 Commercial lines 1 42 45 20 12 7 (2) 2 108 19 Total (116) (64) (92) (60) (176) (221) (83) (105) (332) (585) Esurance brand Auto 2 - (1) 1 - - 1 - 2 1 Homeowners 1 1 1 (1) - (1) (1) - 2 (2) Other personal lines - (1) - - - - (1) - (1) (1) Total 3 - - - - (1) (1) - 3 (2) Encompass brand Auto (7) (2) (1) - (5) - (1) - (10) (6) Homeowners 2 3 2 6 - 1 (2) 3 13 2 Other personal lines (4) (4) (6) - (5) (3) (5) 3 (14) (10) Total (9) (3) (5) 6 (10) (2) (8) 6 (11) (14) Discontinued Lines and Coverages 2 80 2 3 3 88 3 2 87 96 Total Property-Liability $ (120) $ 13 $ (95) $ (51) $ (183) $ (136) $ (89) $ (97) $ (253) $ (505) Effect of Prior Year Reserve Reestimates on Combined Ratio (1)(2) Allstate Protection Auto (1.1) (1.2) (1.9) (1.2) (1.9) (2.4) (0.8) (1.1) (1.3) (1.6) Homeowners (0.4) (0.1) 0.3 0.4 (0.6) (0.5) (0.3) (0.3) - (0.4) Other personal lines 0.1 - (0.1) (0.1) - - (0.1) 0.1 - - Commercial lines - 0.5 0.5 0.2 0.2 0.1 - - 0.3 0.1 Total (1.4) (0.8) (1.2) (0.7) (2.3) (2.8) (1.2) (1.3) (1.0) (1.9) Discontinued Lines and Coverages - 0.9 - - - 1.1 0.1 - 0.2 0.3 Total Property-Liability (1.4) 0.1 (1.2) (0.7) (2.3) (1.7) (1.1) (1.3) (0.8) (1.6) Allstate Protection by brand Allstate brand (1.3) (0.8) (1.1) (0.8) (2.2) (2.8) (1.1) (1.4) (1.0) (1.9) Esurance brand - - - - - - - - - - Encompass brand (0.1) - (0.1) 0.1 (0.1) - (0.1) 0.1 - - Total (1.4) (0.8) (1.2) (0.7) (2.3) (2.8) (1.2) (1.3) (1.0) (1.9) (1) Favorable reserve reestimates are shown in parentheses. (2) Calculated using the total premiums earned for Property-Liability for the respective period. Discontinued Lines and Coverages does not have premiums earned. The Allstate Corporation 4Q18 Supplement 21

 
The Allstate Corporation Property-Liability Catastrophe Losses included in Prior Year Reserve Reestimates ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Allstate Protection (1) Allstate brand Auto $ (2) $ (4) $ (5) $ (27) $ (1) $ (5) $ (1) $ (7) $ (38) $ (14) Homeowners (19) 2 41 (3) 27 (4) (3) - 1 51 (6) Other personal lines 1 - - (3) (2) - (2) 7 (2) 3 Commercial lines - - 1 (1) - 1 (1) 1 - 1 Total (20) (2) 37 (4) (7) (7) (4) 2 11 (16) Esurance brand Homeowners - 1 1 - - - (1) - 2 (1) Total - 1 1 - - - (1) - 2 (1) Encompass brand Auto - (1) - - - - (1) - (1) (1) Homeowners - 3 2 7 (1) 1 (2) 2 12 - Other personal lines - - - 1 - (1) 1 - 1 - Total - 2 2 8 (1) - (2) 2 12 (1) Total Allstate Protection Auto (2) (5) (5) (27) (1) (5) (2) (7) (39) (15) Homeowners (19) 6 44 34 (5) (2) (3) 3 65 (7) Other personal lines 1 - - (2) (2) (1) (1) 7 (1) 3 Commercial lines - - 1 (1) - 1 (1) 1 - 1 Total (20) 1 40 4 (8) (7) (7) 4 25 (18) Discontinued Lines and Coverages - - - - - - - - - - Total Property-Liability $ (20) $ 1 $ 40 $ 4 $ (8) $ (7) $ (7) $ 4 $ 25 $ (18) Effect of Catastrophe Losses included in Prior Year Reserve Reestimates on Combined Ratio (1)(2) Allstate Protection Auto - (0.1) (0.1) (0.4) - (0.1) - (0.1) (0.1) (0.1) Homeowners (0.3) 0.1 0.6 0.4 (0.1) - (0.1) - 0.2 - Other personal lines - - - - - - - 0.1 - - Commercial lines - - - - - - - - - - Total (0.3) - 0.5 - (0.1) (0.1) (0.1) - 0.1 (0.1) Allstate Protection by brand Allstate brand (0.3) - 0.5 (0.1) (0.1) (0.1) (0.1) - - (0.1) Esurance brand - - - - - - - - - - Encompass brand - - - 0.1 - - - - 0.1 - Total (0.3) - 0.5 - (0.1) (0.1) (0.1) - 0.1 (0.1) (1) Favorable reserve reestimates are shown in parentheses. (2) Calculated using the total premiums earned for Property-Liability for the respective period. Discontinued Lines and Coverages does not have premiums earned or incur claims and claims expense related to catastrophes. (3) Includes $37 million for Texas Windstorm Insurance Association assessments related to Hurricane Harvey, which occurred in third quarter 2017. The Allstate Corporation 4Q18 Supplement 22

 
The Allstate Corporation Allstate Protection Impact of Net Rate Changes Approved on Premiums Written Three months ended Three months ended Three months ended December 31, 2018 (1) September 30, 2018 June 30, 2018 Number of Location Number of Location Number of Location locations (7) Total brand (%) (8) specific (%) (9) locations Total brand (%) specific (%) locations Total brand (%) specific (%) Allstate brand Auto (2)(3)(4) 25 0.3 3.2 20 - 1.0 21 0.5 2.5 Homeowners (5)(6) 18 1.1 4.6 10 0.4 3.6 5 0.1 1.8 Esurance brand Auto 8 0.3 1.3 14 0.9 3.4 8 0.5 2.9 Homeowners 1 0.4 9.9 - - - - - - Encompass brand Auto 4 0.5 2.6 7 0.6 4.6 5 1.0 7.9 Homeowners 3 1.2 8.2 11 2.7 7.8 7 0.7 6.1 Three months ended Three months ended Three months ended March 31, 2018 December 31, 2017 September 30, 2017 Number of Location Number of Location Number of Location locations Total brand (%) specific (%) locations Total brand (%) specific (%) locations Total brand (%) specific (%) Allstate brand Auto (2)(3)(4) 24 0.3 2.4 25 1.2 (10) 5.4 (10) 17 0.4 3.0 Homeowners (5)(6) 14 1.1 4.9 11 0.2 1.5 8 0.5 5.3 Esurance brand Auto 2 0.1 4.5 7 0.8 4.2 16 1.6 5.9 Homeowners 5 1.7 6.4 3 4.5 18.5 - - - Encompass brand Auto 4 0.3 3.0 8 1.7 5.7 8 0.8 4.5 Homeowners 3 0.1 2.0 7 0.9 4.5 6 0.9 6.0 (1) Rate changes include changes approved based on our net cost of reinsurance. These rate changes do not reflect initial rates filed for insurance subsidiaries initially writing business. Based on historical premiums written in those 50 states, the District of Columbia and Canadian provinces, rate changes approved for Allstate brand, Esurance brand and Encompass brand for the three month period ending December 31, 2018 are estimated to total $136 million. Rate changes do not include rating plan enhancements, including the introduction of discounts and surcharges that result in no change in the overall rate level in a location. (2) Impacts of Allstate brand auto effective rate changes as a percentage of total brand prior year-end premiums written were 0.2%, 0.4%, 0.1%, 1.2%, 0.5% and 0.4% for the three months ended December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, December 31, 2017 and September 30, 2017, respectively. Rate changes are included in the effective calculations in the period the rate change is effective for renewal contracts. (3) Allstate brand auto rate changes were 1.1%, 2.0%, 2.4%, 2.6%, 4.0% and 4.1% for the trailing twelve months ended December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, December 31, 2017 and September 30, 2017, respectively. (4) Allstate brand auto rate changes were cumulatively $2.3 billion or 12.3% for 2018, 2017 and 2016. (5) Impacts of Allstate brand homeowners effective rate changes as a percentage of total brand prior year-end premiums written were 0.2%, 0.4%, 0.3%, 1.0%, 0.1% and 0.6% for the three months ended December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, December 31, 2017 and September 30, 2017, respectively. (6) Allstate brand homeowner rate changes were cumulatively $386 million or 5.6% for 2018, 2017 and 2016. (7) Allstate brand operates in 50 states, the District of Columbia, and 5 Canadian provinces. Esurance brand operates in 43 states. In the second quarter of 2018, Esurance brand discontinued its operation in Canada. Encompass operates in 40 states and the District of Columbia. (8) Represents the impact in the states, the District of Columbia and Canadian provinces where rate changes were approved during the period as a percentage of total brand prior year-end premiums written. (9) Represents the impact in the states, the District of Columbia and Canadian provinces where rate changes were approved during the period as a percentage of its respective total prior year-end premiums written in those same locations. (10) Includes a rate increase in California in fourth quarter 2017. Excluding California, Allstate brand auto total brand and location specific rate changes were 0.5% and 4.2%, respectively, in fourth quarter 2017. The Allstate Corporation 4Q18 Supplement 23

 
The Allstate Corporation Allstate Brand Profitability Measures ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Net premiums written $ 7,646 $ 8,010 $ 7,807 $ 7,128 $ 7,185 $ 7,587 $ 7,337 $ 6,776 $ 30,591 $ 28,885 Net premiums earned Auto $ 5,275 $ 5,210 $ 5,131 $ 5,046 $ 5,003 $ 4,950 $ 4,884 $ 4,839 $ 20,662 $ 19,676 Homeowners 1,787 1,769 1,742 1,727 1,725 1,707 1,691 1,688 7,025 6,811 Other personal lines 432 432 432 420 419 414 411 405 1,716 1,649 Commercial lines 178 176 165 136 128 124 118 125 655 495 Total $ 7,672 $ 7,587 $ 7,470 $ 7,329 $ 7,275 $ 7,195 $ 7,104 $ 7,057 $ 30,058 $ 28,631 Other revenue Auto $ 65 $ 56 $ 56 $ 54 $ 53 $ 54 $ 54 $ 53 $ 231 $ 214 Homeowners 12 11 11 11 12 10 10 10 45 42 Other personal lines 34 36 34 28 30 38 33 26 132 127 Commercial lines 1 2 1 2 - 2 3 3 6 8 Other business lines (1) 39 47 41 41 39 45 45 39 168 168 Total $ 151 $ 152 $ 143 $ 136 $ 134 $ 149 $ 145 $ 131 $ 582 $ 559 Incurred losses Auto $ 3,530 $ 3,504 $ 3,437 $ 3,204 $ 3,289 $ 3,455 $ 3,442 $ 3,224 $ 13,675 $ 13,410 Homeowners 1,447 1,127 1,310 997 1,052 988 1,273 1,194 4,881 4,507 Other personal lines 317 306 260 258 226 312 258 265 1,141 1,061 Commercial lines 141 184 166 108 89 103 86 96 599 374 Total $ 5,435 $ 5,121 $ 5,173 $ 4,567 $ 4,656 $ 4,858 $ 5,059 $ 4,779 $ 20,296 $ 19,352 Expenses Auto $ 1,434 $ 1,394 $ 1,392 $ 1,317 $ 1,363 $ 1,288 $ 1,282 $ 1,216 $ 5,537 $ 5,149 Homeowners 454 440 413 410 433 410 381 397 1,717 1,621 Other personal lines 163 161 148 144 158 158 148 138 616 602 Commercial lines 38 37 37 37 37 38 37 36 149 148 Other business lines (1) 29 32 25 33 25 30 34 28 119 117 Total $ 2,118 $ 2,064 $ 2,015 $ 1,941 $ 2,016 $ 1,924 $ 1,882 $ 1,815 $ 8,138 $ 7,637 Underwriting income (loss) Auto $ 376 $ 368 $ 358 $ 579 $ 404 $ 261 $ 214 $ 452 $ 1,681 $ 1,331 Homeowners (102) 213 30 331 252 319 47 107 472 725 Other personal lines (14) 1 58 46 65 (18) 38 28 91 113 Commercial lines - (43) (37) (7) 2 (15) (2) (4) (87) (19) Other business lines 10 15 16 8 14 15 11 11 49 51 Total $ 270 $ 554 $ 425 $ 957 $ 737 $ 562 $ 308 $ 594 $ 2,206 $ 2,201 Loss ratio 70.9 67.5 69.2 62.3 64.0 67.5 71.2 67.7 67.6 67.6 Expense ratio (2) 25.6 25.2 25.1 24.6 25.9 24.7 24.5 23.9 25.1 24.7 Combined ratio 96.5 92.7 94.3 86.9 89.9 92.2 95.7 91.6 92.7 92.3 Loss ratio 70.9 67.5 69.2 62.3 64.0 67.5 71.2 67.7 67.6 67.6 Less: effect of catastrophe losses 12.3 7.8 11.2 4.5 7.4 11.5 12.9 10.0 9.0 10.4 effect of prior year non-catastrophe reserve reestimates (1.2) (0.8) (1.7) (0.8) (2.3) (3.0) (1.1) (1.5) (1.1) (2.0) Underlying loss ratio * 59.8 60.5 59.7 58.6 58.9 59.0 59.4 59.2 59.7 59.2 Reconciliation of combined ratio to underlying combined ratio Combined ratio 96.5 92.7 94.3 86.9 89.9 92.2 95.7 91.6 92.7 92.3 Effect of catastrophe losses (12.3) (7.8) (11.2) (4.5) (7.4) (11.5) (12.9) (10.0) (9.0) (10.4) Effect of prior year non-catastrophe reserve reestimates 1.2 0.8 1.7 0.8 2.3 3.0 1.1 1.5 1.1 2.0 Underlying combined ratio * 85.4 85.7 84.8 83.2 84.8 83.7 83.9 83.1 84.8 83.9 Effect of prior year reserve reestimates on combined ratio (1.5) (0.8) (1.2) (0.8) (2.4) (3.1) (1.2) (1.5) (1.1) (2.0) Effect of advertising expenses on combined ratio 2.5 2.5 2.0 1.6 2.0 2.1 1.9 2.0 2.2 2.0 (1) Other business lines primarily include Ivantage and represent commissions earned and other costs and expenses. (2) Other revenue is deducted from other costs and expenses in the expense ratio calculation. The Allstate Corporation 4Q18 Supplement 24

 
The Allstate Corporation Allstate Brand Statistics (1) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 New Issued Applications (in thousands) (2) Auto 710 755 754 714 620 651 639 610 2,933 2,520 Homeowners 197 219 223 187 177 198 195 163 826 733 Average Premium - Gross Written ($) (3) Auto 578 572 566 564 561 556 544 538 570 550 Homeowners 1,243 1,238 1,226 1,212 1,206 1,203 1,192 1,187 1,231 1,197 Average Premium - Net Earned ($) (4) Auto 528 525 522 516 512 507 499 492 523 503 Homeowners 1,156 1,148 1,135 1,131 1,131 1,119 1,106 1,106 1,142 1,115 Annualized Average Premium ($) (5) Auto 1,050 1,047 1,036 1,029 1,022 1,015 999 989 1,028 1,005 Homeowners 1,156 1,152 1,138 1,134 1,133 1,125 1,117 1,112 1,136 1,119 Average Underlying Loss (Incurred Pure Premium) and Expense * ($) (6) Auto 983 968 961 926 963 925 925 899 948 927 Homeowners 716 753 720 720 679 689 668 682 721 677 Renewal Ratio (%) (7) Auto 88.5 88.7 88.5 88.3 87.8 87.7 87.4 87.4 88.5 87.6 Homeowners 88.5 88.3 87.7 87.5 87.5 87.5 87.0 87.1 88.0 87.3 Auto Property Damage (% change year-over-year) Gross claim frequency (8) (2.5) (2.7) (2.9) (2.5) (4.1) (8.0) (5.2) (3.9) (2.6) (5.3) Paid claim frequency (8) (0.6) 0.2 (3.0) (3.0) (5.2) (9.0) (3.4) (3.2) (1.7) (5.2) Paid claim severity (9) 7.4 7.7 3.7 4.7 6.7 4.9 1.6 4.8 5.9 4.5 Bodily Injury (% change year-over-year) Gross claim frequency (8) (2.5) (0.7) (2.7) (2.0) (2.9) (5.6) (4.7) (6.0) (2.0) (4.8) Homeowners Excluding Catastrophe Losses (% change year-over-year) Gross claim frequency (8) 8.7 7.0 7.1 (1.1) (2.9) (2.6) 6.0 7.6 5.2 1.9 Paid claim frequency (8) 9.0 8.5 5.9 (4.0) (3.7) (5.4) 7.1 2.3 4.8 (0.1) Paid claim severity (9) (0.1) 3.4 5.0 14.4 8.1 8.1 (0.2) 4.1 5.5 5.0 (1) Statistics presented for Allstate brand exclude excess and surplus lines. (2) New Issued Applications: Item counts of automobiles or homeowners insurance applications for insurance policies that were issued during the period, regardless of whether the customer was previously insured by another Allstate Protection brand. Allstate brand includes automobiles added by existing customers when they exceed the number allowed (currently 10) on a policy. (3) Average Premium - Gross Written: Gross premiums written divided by issued item count. Gross premiums written include the impacts from discounts, surcharges and ceded reinsurance premiums and exclude the impacts from mid-term premium adjustments and premium refund accruals. Average premiums represent the appropriate policy term for each line, which is 6 months for auto and 12 months for homeowners. (4) Average Premium - Net Earned: Earned premium divided by average policies in force for the period. Earned premium includes the impacts from mid-term premium adjustments and ceded reinsurance, but does not include impacts of premium refund accruals. Average premiums represent the appropriate policy term for each line, which is 6 months for auto and 12 months for homeowners. (5) Annualized Average Premium is calculated by annualizing net earned premium reported in the quarter and year-to-date divided by policies in force at quarter end. (6) Average underlying loss (incurred pure premium) and expense is calculated as the underlying combined ratio multiplied by the annualized average premium. (7) Renewal ratio: Renewal policies issued during the period, based on contract effective dates, divided by the total policies issued 6 months prior for auto or 12 months prior for homeowners. (8) Paid claim frequency is calculated as annualized notice counts closed with payment in the period divided by the average of policies in force with the applicable coverage during the period. Gross claim frequency is calculated as annualized notice counts received in the period divided by the average of policies in force with the applicable coverage during the period. Gross claim frequency includes all actual notice counts, regardless of their current status (open or closed) or their ultimate disposition (closed with a payment or closed without payment). Frequency statistics exclude counts associated with catastrophe events. The percent change in paid or gross claim frequency is calculated as the amount of increase or decrease in the paid or gross claim frequency in the current period compared to the same period in the prior year; divided by the prior year paid or gross claim frequency. (9) Paid claim severity is calculated by dividing the sum of paid losses and loss expenses by claims closed with a payment during the period. The percent change in paid claim severity is calculated as the amount of increase or decrease in paid claim severity in the current period compared to the same period in the prior year; divided by the prior year paid claims severity. The Allstate Corporation 4Q18 Supplement 25

 
The Allstate Corporation Esurance Brand Profitability Measures and Statistics ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Net premiums written $ 477 $ 519 $ 459 $ 493 $ 410 $ 453 $ 408 $ 457 $ 1,948 $ 1,728 Net premiums earned Auto $ 466 $ 455 $ 439 $ 411 $ 411 $ 411 $ 411 $ 403 $ 1,771 $ 1,636 Homeowners 26 22 22 20 19 19 16 14 90 68 Other personal lines 2 2 2 2 2 2 2 2 8 8 Total $ 494 $ 479 $ 463 $ 433 $ 432 $ 432 $ 429 $ 419 $ 1,869 $ 1,712 Other revenue Auto $ 19 $ 21 $ 20 $ 20 $ 17 $ 17 $ 17 $ 16 $ 80 $ 67 Total $ 19 $ 21 $ 20 $ 20 $ 17 $ 17 $ 17 $ 16 $ 80 $ 67 Incurred losses Auto $ 374 $ 346 $ 334 $ 309 $ 322 $ 322 $ 324 $ 300 $ 1,363 $ 1,268 Homeowners 16 20 28 11 9 14 21 13 75 57 Other personal lines 2 - 2 1 1 1 1 1 5 4 Total $ 392 $ 366 $ 364 $ 321 $ 332 $ 337 $ 346 $ 314 $ 1,443 $ 1,329 Expenses Auto $ 123 $ 135 $ 120 $ 121 $ 111 $ 121 $ 117 $ 123 $ 499 $ 472 Homeowners 6 8 8 7 6 9 8 8 29 31 Other personal lines 1 1 - 1 1 1 1 - 3 3 Total $ 130 $ 144 $ 128 $ 129 $ 118 $ 131 $ 126 $ 131 $ 531 $ 506 Underwriting income (loss) Auto $ (12) $ (5) $ 5 $ 1 $ (5) $ (15) $ (13) $ (4) $ (11) $ (37) Homeowners 4 (6) (14) 2 4 (4) (13) (7) (14) (20) Other personal lines (1) 1 - - - - - 1 - 1 Total $ (9) $ (10) $ (9) $ 3 $ (1) $ (19) $ (26) $ (10) $ (25) $ (56) Loss ratio 79.3 76.4 78.6 74.1 76.8 78.0 80.7 74.9 77.2 77.6 Expense ratio (1) 22.5 25.7 23.3 25.2 23.4 26.4 25.4 27.5 24.1 25.7 Combined ratio 101.8 102.1 101.9 99.3 100.2 104.4 106.1 102.4 101.3 103.3 Loss ratio 79.3 76.4 78.6 74.1 76.8 78.0 80.7 74.9 77.2 77.6 Less: effect of catastrophe losses 1.2 2.9 6.2 0.7 0.2 3.9 5.6 1.9 2.8 2.9 effect of prior year non-catastrophe reserve reestimates 0.6 (0.2) (0.2) - - (0.2) - - 0.1 - Underlying loss ratio * 77.5 73.7 72.6 73.4 76.6 74.3 75.1 73.0 74.3 74.7 Reconciliation of combined ratio to underlying combined ratio Combined ratio 101.8 102.1 101.9 99.3 100.2 104.4 106.1 102.4 101.3 103.3 Effect of catastrophe losses (1.2) (2.9) (6.2) (0.7) (0.2) (3.9) (5.6) (1.9) (2.8) (2.9) Effect of prior year non-catastrophe reserve reestimates (0.6) 0.2 0.2 - - 0.2 - - (0.1) - Effect of amortization of purchased intangible assets (0.2) (0.2) - (0.2) (0.2) (0.2) - (0.3) (0.1) (0.2) Underlying combined ratio * 99.8 99.2 95.9 98.4 99.8 100.5 100.5 100.2 98.3 100.2 Effect of prior year reserve reestimates on combined ratio 0.6 - - - - (0.2) (0.2) - 0.2 (0.1) Effect of advertising expenses on combined ratio 7.5 10.6 8.6 8.1 6.7 9.3 8.6 8.6 8.7 8.3 Policies in Force (in thousands) Auto 1,488 1,463 1,432 1,399 1,352 1,369 1,388 1,400 1,488 1,352 Homeowners 95 92 88 84 79 76 69 63 95 79 Other personal lines 46 46 46 45 44 45 47 48 46 44 1,629 1,601 1,566 1,528 1,475 1,490 1,504 1,511 1,629 1,475 New Issued Applications (in thousands) Auto 153 166 156 158 105 116 120 143 633 484 Homeowners 6 9 9 8 7 10 9 8 32 34 Average Premium - Gross Written ($) Auto (6-month policy) 608 603 602 605 586 574 564 571 605 574 Homeowners (12-month policy) 974 984 977 970 901 924 910 919 982 917 Renewal Ratio (%) Auto 82.8 82.9 84.3 83.5 82.2 81.8 81.9 80.4 83.3 81.5 Homeowners 84.4 85.9 86.2 84.4 85.7 85.8 86.1 83.5 85.3 85.5 (1) Other revenue is deducted from other costs and expenses in the expense ratio calculation. The Allstate Corporation 4Q18 Supplement 26

 
The Allstate Corporation Encompass Brand Profitability Measures and Statistics ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Net premiums written $ 247 $ 271 $ 275 $ 223 $ 243 $ 271 $ 285 $ 236 $ 1,016 $ 1,035 Net premiums earned Auto $ 135 $ 133 $ 135 $ 134 $ 137 $ 140 $ 143 $ 146 $ 537 $ 566 Homeowners 101 100 100 101 104 106 108 113 402 431 Other personal lines 20 21 21 22 23 23 23 24 84 93 Total $ 256 $ 254 $ 256 $ 257 $ 264 $ 269 $ 274 $ 283 $ 1,023 $ 1,090 Other revenue Auto $ 1 $ - $ 1 $ 1 $ - $ 1 $ 1 $ 1 $ 3 $ 3 Homeowners - 1 1 - 1 - - 1 2 2 Other personal lines - - - - 1 - - - - 1 Total $ 1 $ 1 $ 2 $ 1 $ 2 $ 1 $ 1 $ 2 $ 5 $ 6 Incurred losses Auto $ 99 $ 83 $ 82 $ 86 $ 88 $ 91 $ 105 $ 104 $ 350 $ 388 Homeowners 59 70 74 66 100 54 84 108 269 346 Other personal lines 17 9 9 15 11 13 10 21 50 55 Total $ 175 $ 162 $ 165 $ 167 $ 199 $ 158 $ 199 $ 233 $ 669 $ 789 Expenses Auto $ 46 $ 42 $ 46 $ 45 $ 42 $ 44 $ 47 $ 44 $ 179 $ 177 Homeowners 33 34 35 34 34 32 34 34 136 134 Other personal lines 8 7 8 8 8 7 7 7 31 29 Total $ 87 $ 83 $ 89 $ 87 $ 84 $ 83 $ 88 $ 85 $ 346 $ 340 Underwriting income (loss) Auto $ (9) $ 8 $ 8 $ 4 $ 7 $ 6 $ (8) $ (1) $ 11 $ 4 Homeowners 9 (3) (8) 1 (29) 20 (10) (28) (1) (47) Other personal lines (5) 5 4 (1) 5 3 6 (4) 3 10 Total $ (5) $ 10 $ 4 $ 4 $ (17) $ 29 $ (12) $ (33) $ 13 $ (33) Loss ratio 68.4 63.8 64.4 65.0 75.4 58.7 72.6 82.4 65.4 72.4 Expense ratio (1) 33.6 32.3 34.0 33.4 31.0 30.5 31.8 29.3 33.3 30.6 Combined ratio 102.0 96.1 98.4 98.4 106.4 89.2 104.4 111.7 98.7 103.0 Loss ratio 68.4 63.8 64.4 65.0 75.4 58.7 72.6 82.4 65.4 72.4 Less: effect of catastrophe losses 3.9 9.1 15.6 11.3 23.4 4.5 19.0 23.7 10.0 17.7 effect of prior year non-catastrophe reserve reestimates (3.5) (2.0) (2.7) (0.8) (3.4) (0.8) (2.2) 1.4 (2.3) (1.2) Underlying loss ratio * 68.0 56.7 51.5 54.5 55.4 55.0 55.8 57.3 57.7 55.9 Reconciliation of combined ratio to underlying combined ratio Combined ratio 102.0 96.1 98.4 98.4 106.4 89.2 104.4 111.7 98.7 103.0 Effect of catastrophe losses (3.9) (9.1) (15.6) (11.3) (23.4) (4.5) (19.0) (23.7) (10.0) (17.7) Effect of prior year non-catastrophe reserve reestimates 3.5 2.0 2.7 0.8 3.4 0.8 2.2 (1.4) 2.3 1.2 Underlying combined ratio * 101.6 89.0 85.5 87.9 86.4 85.5 87.6 86.6 91.0 86.5 Effect of prior year reserve reestimates on combined ratio (3.5) (1.2) (1.9) 2.3 (3.8) (0.8) (2.9) 2.1 (1.1) (1.3) Effect of advertising expenses on combined ratio 0.4 - 0.4 - 0.4 0.4 - - 0.2 0.2 Policies in Force (in thousands) Auto 502 504 507 517 530 548 571 595 502 530 Homeowners 239 240 243 248 254 262 273 284 239 254 Other personal lines 78 80 81 83 85 88 91 94 78 85 819 824 831 848 869 898 935 973 819 869 New Issued Applications (in thousands) Auto 19 21 19 17 14 13 13 12 76 52 Homeowners 9 10 10 8 7 8 8 7 37 30 Average Premium - Gross Written ($) Auto (12-month policy) 1,136 1,115 1,104 1,116 1,111 1,087 1,065 1,057 1,118 1,079 Homeowners (12-month policy) 1,766 1,730 1,701 1,698 1,706 1,703 1,667 1,659 1,724 1,684 Renewal Ratio (%) Auto 77.5 76.4 73.3 72.5 73.2 73.5 73.8 73.0 74.9 73.4 Homeowners 81.8 80.9 78.9 78.3 78.3 78.7 78.5 78.4 80.0 78.5 (1) Other revenue is deducted from other costs and expenses in the expense ratio calculation. The Allstate Corporation 4Q18 Supplement 27

 
The Allstate Corporation Auto Profitability Measures by Brand ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Allstate brand auto Net premiums written $ 5,272 $ 5,357 $ 5,211 $ 5,151 $ 4,956 $ 5,096 $ 4,925 $ 4,882 $ 20,991 $ 19,859 Net premiums earned $ 5,275 $ 5,210 $ 5,131 $ 5,046 $ 5,003 $ 4,950 $ 4,884 $ 4,839 $ 20,662 $ 19,676 Other revenue 65 56 56 54 53 54 54 53 231 214 Incurred losses (3,530) (3,504) (3,437) (3,204) (3,289) (3,455) (3,442) (3,224) (13,675) (13,410) Expenses (1,434) (1,394) (1,392) (1,317) (1,363) (1,288) (1,282) (1,216) (5,537) (5,149) Underwriting income $ 376 $ 368 $ 358 $ 579 $ 404 $ 261 $ 214 $ 452 $ 1,681 $ 1,331 Loss ratio 66.9 67.2 67.0 63.5 65.7 69.8 70.5 66.6 66.2 68.1 Less: effect of catastrophe losses 1.0 2.2 3.1 - 0.7 7.3 4.2 1.4 1.6 3.4 effect of prior year non-catastrophe reserve reestimates (1.7) (1.8) (2.9) (1.5) (3.0) (3.7) (1.2) (1.6) (1.9) (2.4) Underlying loss ratio * 67.6 66.8 66.8 65.0 68.0 66.2 67.5 66.8 66.5 67.1 Expense ratio (1) 26.0 25.7 26.0 25.0 26.2 24.9 25.1 24.1 25.7 25.1 Combined ratio 92.9 92.9 93.0 88.5 91.9 94.7 95.6 90.7 91.9 93.2 Effect of catastrophe losses (1.0) (2.2) (3.1) - (0.7) (7.3) (4.2) (1.4) (1.6) (3.4) Effect of prior year non-catastrophe reserve reestimates 1.7 1.8 2.9 1.5 3.0 3.7 1.2 1.6 1.9 2.4 Underlying combined ratio * 93.6 92.5 92.8 90.0 94.2 91.1 92.6 90.9 92.2 92.2 Esurance brand auto Net premiums written $ 452 $ 487 $ 430 $ 470 $ 389 $ 427 $ 386 $ 439 $ 1,839 $ 1,641 Net premiums earned $ 466 $ 455 $ 439 $ 411 $ 411 $ 411 $ 411 $ 403 $ 1,771 $ 1,636 Other revenue 19 21 20 20 17 17 17 16 80 67 Incurred losses (374) (346) (334) (309) (322) (322) (324) (300) (1,363) (1,268) Expenses (123) (135) (120) (121) (111) (121) (117) (123) (499) (472) Underwriting (loss) income $ (12) $ (5) $ 5 $ 1 $ (5) $ (15) $ (13) $ (4) $ (11) $ (37) Loss ratio 80.3 76.0 76.1 75.2 78.3 78.3 78.9 74.4 77.0 77.5 Less: effect of catastrophe losses 0.4 1.8 3.4 0.5 - 3.6 3.6 1.0 1.5 2.1 effect of prior year non-catastrophe reserve reestimates 0.4 - (0.2) 0.3 - - 0.3 - 0.1 0.1 Underlying loss ratio * 79.5 74.2 72.9 74.4 78.3 74.7 75.0 73.4 75.4 75.3 Expense ratio (1) 22.3 25.1 22.8 24.6 22.9 25.3 24.3 26.6 23.6 24.8 Combined ratio 102.6 101.1 98.9 99.8 101.2 103.6 103.2 101.0 100.6 102.3 Effect of catastrophe losses (0.4) (1.8) (3.4) (0.5) - (3.6) (3.6) (1.0) (1.5) (2.1) Effect of prior year non-catastrophe reserve reestimates (0.4) - 0.2 (0.3) - - (0.3) - (0.1) (0.1) Effect of amortization of purchased intangible assets (0.3) (0.2) - (0.2) (0.2) (0.2) - (0.2) (0.2) (0.2) Underlying combined ratio * 101.5 99.1 95.7 98.8 101.0 99.8 99.3 99.8 98.8 99.9 Encompass brand auto Net premiums written $ 130 $ 143 $ 146 $ 118 $ 128 $ 141 $ 148 $ 125 $ 537 $ 542 Net premiums earned $ 135 $ 133 $ 135 $ 134 $ 137 $ 140 $ 143 $ 146 $ 537 $ 566 Other revenue 1 - 1 1 - 1 1 1 3 3 Incurred losses (99) (83) (82) (86) (88) (91) (105) (104) (350) (388) Expenses (46) (42) (46) (45) (42) (44) (47) (44) (179) (177) Underwriting (loss) income $ (9) $ 8 $ 8 $ 4 $ 7 $ 6 $ (8) $ (1) $ 11 $ 4 Loss ratio 73.4 62.4 60.8 64.2 64.2 65.0 73.4 71.2 65.2 68.6 Less: effect of catastrophe losses (0.7) 1.5 3.0 0.7 - 0.7 4.9 2.8 1.1 2.1 effect of prior year non-catastrophe reserve reestimates (5.2) (0.7) (0.8) - (3.6) - - - (1.6) (0.9) Underlying loss ratio * 79.3 61.6 58.6 63.5 67.8 64.3 68.5 68.4 65.7 67.4 Expense ratio (1) 33.3 31.6 33.3 32.8 30.7 30.7 32.2 29.5 32.8 30.7 Combined ratio 106.7 94.0 94.1 97.0 94.9 95.7 105.6 100.7 98.0 99.3 Effect of catastrophe losses 0.7 (1.5) (3.0) (0.7) - (0.7) (4.9) (2.8) (1.1) (2.1) Effect of prior year non-catastrophe reserve reestimates 5.2 0.7 0.8 - 3.6 - - - 1.6 0.9 Underlying combined ratio * 112.6 93.2 91.9 96.3 98.5 95.0 100.7 97.9 98.5 98.1 (1) Other revenue is deducted from other costs and expenses in the expense ratio calculation. The Allstate Corporation 4Q18 Supplement 28

 
The Allstate Corporation Homeowners Profitability Measures by Brand ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Allstate brand homeowners Net premiums written $ 1,777 $ 2,008 $ 1,949 $ 1,465 $ 1,694 $ 1,921 $ 1,847 $ 1,403 $ 7,199 $ 6,865 Net premiums earned $ 1,787 $ 1,769 $ 1,742 $ 1,727 $ 1,725 $ 1,707 $ 1,691 $ 1,688 $ 7,025 $ 6,811 Other revenue 12 11 11 11 12 10 10 10 45 42 Incurred losses (1,447) (1,127) (1,310) (997) (1,052) (988) (1,273) (1,194) (4,881) (4,507) Expenses (454) (440) (413) (410) (433) (410) (381) (397) (1,717) (1,621) Underwriting (loss) income $ (102) $ 213 $ 30 $ 331 $ 252 $ 319 $ 47 $ 107 $ 472 $ 725 Loss ratio 81.0 63.7 75.2 57.7 61.0 57.9 75.3 70.8 69.5 66.2 Less: effect of catastrophe losses 44.7 23.6 36.0 17.3 27.8 22.4 38.4 34.1 30.5 30.7 effect of prior year non-catastrophe reserve reestimates (0.9) (1.0) (1.0) - (2.3) (2.3) (1.0) (1.7) (0.7) (1.8) Underlying loss ratio * 37.2 41.1 40.2 40.4 35.5 37.8 37.9 38.4 39.7 37.3 Expense ratio (1) 24.7 24.3 23.1 23.1 24.4 23.4 21.9 22.9 23.8 23.2 Combined ratio 105.7 88.0 98.3 80.8 85.4 81.3 97.2 93.7 93.3 89.4 Effect of catastrophe losses (44.7) (23.6) (36.0) (17.3) (27.8) (22.4) (38.4) (34.1) (30.5) (30.7) Effect of prior year non-catastrophe reserve reestimates 0.9 1.0 1.0 - 2.3 2.3 1.0 1.7 0.7 1.8 Underlying combined ratio * 61.9 65.4 63.3 63.5 59.9 61.2 59.8 61.3 63.5 60.5 Esurance brand homeowners Net premiums written $ 23 $ 30 $ 27 $ 21 $ 19 $ 24 $ 20 $ 16 $ 101 $ 79 Net premiums earned $ 26 $ 22 $ 22 $ 20 $ 19 $ 19 $ 16 $ 14 $ 90 $ 68 Incurred losses (16) (20) (28) (11) (9) (14) (21) (13) (75) (57) Expenses (6) (8) (8) (7) (6) (9) (8) (8) (29) (31) Underwriting income (loss) $ 4 $ (6) $ (14) $ 2 $ 4 $ (4) $ (13) $ (7) $ (14) $ (20) Loss ratio 61.5 90.9 127.3 55.0 47.3 73.7 131.3 92.9 83.4 83.8 Less: effect of catastrophe losses 15.4 27.3 63.6 5.0 5.2 10.5 56.3 28.6 27.8 23.5 effect of prior year non-catastrophe reserve reestimates 3.8 - - (5.0) - (5.2) - - - (1.5) Underlying loss ratio * 42.3 63.6 63.7 55.0 42.1 68.4 75.0 64.3 55.6 61.8 Expense ratio (1) 23.1 36.4 36.3 35.0 31.6 47.4 50.0 57.1 32.2 45.6 Combined ratio 84.6 127.3 163.6 90.0 78.9 121.1 181.3 150.0 115.6 129.4 Effect of catastrophe losses (15.4) (27.3) (63.6) (5.0) (5.2) (10.5) (56.3) (28.6) (27.8) (23.5) Effect of prior year non-catastrophe reserve reestimates (3.8) - - 5.0 - 5.2 - - - 1.5 Underlying combined ratio * 65.4 100.0 100.0 90.0 73.7 115.8 125.0 121.4 87.8 107.4 Encompass brand homeowners Net premiums written $ 98 $ 106 $ 108 $ 86 $ 95 $ 108 $ 112 $ 91 $ 398 $ 406 Net premiums earned $ 101 $ 100 $ 100 $ 101 $ 104 $ 106 $ 108 $ 113 $ 402 $ 431 Other revenue - 1 1 - 1 - - 1 2 2 Incurred losses (59) (70) (74) (66) (100) (54) (84) (108) (269) (346) Expenses (33) (34) (35) (34) (34) (32) (34) (34) (136) (134) Underwriting income (loss) $ 9 $ (3) $ (8) $ 1 $ (29) $ 20 $ (10) $ (28) $ (1) $ (47) Loss ratio 58.4 70.0 74.0 65.3 96.2 50.9 77.8 95.6 66.9 80.3 Less: effect of catastrophe losses 8.9 20.0 34.0 25.7 56.7 10.3 38.9 54.0 22.1 40.1 effect of prior year non-catastrophe reserve reestimates 2.0 - - (1.0) 1.0 - - 0.9 0.2 0.5 Underlying loss ratio * 47.5 50.0 40.0 40.6 38.5 40.6 38.9 40.7 44.6 39.7 Expense ratio (1) 32.7 33.0 34.0 33.7 31.7 30.2 31.5 29.2 33.3 30.6 Combined ratio 91.1 103.0 108.0 99.0 127.9 81.1 109.3 124.8 100.2 110.9 Effect of catastrophe losses (8.9) (20.0) (34.0) (25.7) (56.7) (10.3) (38.9) (54.0) (22.1) (40.1) Effect of prior year non-catastrophe reserve reestimates (2.0) - - 1.0 (1.0) - - (0.9) (0.2) (0.5) Underlying combined ratio * 80.2 83.0 74.0 74.3 70.2 70.8 70.4 69.9 77.9 70.3 (1) Other revenue is deducted from other costs and expenses in the expense ratio calculation. The Allstate Corporation 4Q18 Supplement 29

 
The Allstate Corporation Other Personal Lines Profitability Measures by Brand (1) ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Allstate brand other personal lines Net premiums written $ 420 $ 472 $ 475 $ 375 $ 410 $ 454 $ 441 $ 368 $ 1,742 $ 1,673 Net premiums earned $ 432 $ 432 $ 432 $ 420 $ 419 $ 414 $ 411 $ 405 $ 1,716 $ 1,649 Other revenue 34 36 34 28 30 38 33 26 132 127 Incurred losses (317) (306) (260) (258) (226) (312) (258) (265) (1,141) (1,061) Expenses (163) (161) (148) (144) (158) (158) (148) (138) (616) (602) Underwriting (loss) income $ (14) $ 1 $ 58 $ 46 $ 65 $ (18) $ 38 $ 28 $ 91 $ 113 Loss ratio 73.4 70.9 60.2 61.4 53.9 75.3 62.8 65.4 66.5 64.3 Less: effect of catastrophe losses 20.1 11.8 10.7 6.4 4.8 15.7 13.9 14.6 12.3 12.2 effect of prior year non-catastrophe reserve reestimates 2.5 1.9 (1.4) (0.7) 1.9 0.7 (0.2) (0.3) 0.6 0.5 Underlying loss ratio * 50.8 57.2 50.9 55.7 47.2 58.9 49.1 51.1 53.6 51.6 Expense ratio (2) 29.8 28.9 26.4 27.6 30.6 29.0 28.0 27.7 28.2 28.8 Combined ratio 103.2 99.8 86.6 89.0 84.5 104.3 90.8 93.1 94.7 93.1 Effect of catastrophe losses (20.1) (11.8) (10.7) (6.4) (4.8) (15.7) (13.9) (14.6) (12.3) (12.2) Effect of prior year non-catastrophe reserve reestimates (2.5) (1.9) 1.4 0.7 (1.9) (0.7) 0.2 0.3 (0.6) (0.5) Underlying combined ratio * 80.6 86.1 77.3 83.3 77.8 87.9 77.1 78.8 81.8 80.4 Esurance brand other personal lines Net premiums written $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 8 $ 8 Net premiums earned $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 8 $ 8 Incurred losses (2) - (2) (1) (1) (1) (1) (1) (5) (4) Expenses (1) (1) - (1) (1) (1) (1) - (3) (3) Underwriting (loss) income $ (1) $ 1 $ - $ - $ - $ - $ - $ 1 $ - $ 1 Encompass brand other personal lines Net premiums written $ 19 $ 22 $ 21 $ 19 $ 20 $ 22 $ 25 $ 20 $ 81 $ 87 Net premiums earned $ 20 $ 21 $ 21 $ 22 $ 23 $ 23 $ 23 $ 24 $ 84 $ 93 Incurred losses (17) (9) (9) (15) (11) (13) (10) (21) (50) (55) Expenses (8) (7) (8) (8) (8) (7) (7) (7) (31) (29) Underwriting (loss) income $ (5) $ 5 $ 4 $ (1) $ 5 $ 3 $ 6 $ (4) $ 3 $ 10 Loss ratio 85.0 42.9 42.9 68.2 47.8 56.5 43.5 87.5 59.5 59.1 Less: effect of catastrophe losses 10.0 4.8 9.5 9.1 13.0 - 13.0 8.3 8.3 8.6 effect of prior year non-catastrophe reserve reestimates (20.0) (19.1) (28.5) (4.6) (21.7) (8.7) (26.1) 12.6 (17.9) (10.8) Underlying loss ratio * 95.0 57.2 61.9 63.7 56.5 65.2 56.6 66.6 69.1 61.3 Expense ratio (2) 40.0 33.3 38.1 36.3 30.5 30.5 30.4 29.2 36.9 30.1 Combined ratio 125.0 76.2 81.0 104.5 78.3 87.0 73.9 116.7 96.4 89.2 Effect of catastrophe losses (10.0) (4.8) (9.5) (9.1) (13.0) - (13.0) (8.3) (8.3) (8.6) Effect of prior year non-catastrophe reserve reestimates 20.0 19.1 28.5 4.6 21.7 8.7 26.1 (12.6) 17.9 10.8 Underlying combined ratio * 135.0 90.5 100.0 100.0 87.0 95.7 87.0 95.8 106.0 91.4 (1) Other personal lines include renters, condominium, landlord and other personal lines products in Allstate Protection. (2) Other revenue is deducted from other costs and expenses in the expense ratio calculation. The Allstate Corporation 4Q18 Supplement 30

 
The Allstate Corporation Commercial Lines Profitability Measures (1) ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 (3) 2017 Net premiums written $ 177 $ 173 $ 172 $ 137 $ 125 $ 116 $ 124 $ 123 $ 659 $ 488 Net premiums earned $ 178 $ 176 $ 165 $ 136 $ 128 $ 124 $ 118 $ 125 $ 655 $ 495 Other revenue 1 2 1 2 - 2 3 3 6 8 Incurred losses (141) (184) (166) (108) (89) (103) (86) (96) (599) (374) Expenses (38) (37) (37) (37) (37) (38) (37) (36) (149) (148) Underwriting (loss) income $ - $ (43) $ (37) $ (7) $ 2 $ (15) $ (2) $ (4) $ (87) $ (19) Loss ratio 79.2 104.5 100.6 79.4 69.5 83.1 72.9 76.8 91.5 75.5 Expense ratio (2) 20.8 19.9 21.8 25.7 28.9 29.0 28.8 26.4 21.8 28.3 Combined ratio 100.0 124.4 122.4 105.1 98.4 112.1 101.7 103.2 113.3 103.8 Reconciliation of combined ratio to underlying combined ratio Combined ratio 100.0 124.4 122.4 105.1 98.4 112.1 101.7 103.2 113.3 103.8 Effect of catastrophe losses on combined ratio (5.0) (3.4) (2.4) (2.2) (1.6) (10.5) (1.7) (5.6) (3.4) (4.8) Effect of prior year non-catastrophe reserve reestimates (0.6) (23.8) (26.7) (15.4) (9.3) (4.8) 0.8 (0.8) (16.5) (3.6) Underlying combined ratio * 94.4 97.2 93.3 87.5 87.5 96.8 100.8 96.8 93.4 95.4 Effect of prior year reserve reestimates on combined ratio 0.6 23.8 27.3 14.7 9.3 5.6 (1.7) 1.6 16.5 3.8 Effect of catastrophe losses included in prior year reserve reestimates on combined ratio - - 0.6 (0.7) - 0.8 (0.9) 0.8 - 0.2 (1) Commercial lines are all Allstate brand products. (2) Other revenue is deducted from other costs and expenses in the expense ratio calculation. (3) Includes an agreement with a transportation network company to provide commercial auto insurance coverage in select states that became effective March 1, 2018. Incurred losses are based on original pricing expectations given limited loss experience. The Allstate Corporation 4Q18 Supplement 31

 
The Allstate Corporation Discontinued Lines and Coverages Reserves ($ in millions) Three months ended Twelve months ended December 31, Dec. 31, Sept. 30, June 30, March 31, (net of reinsurance) 2018 2018 2018 2018 2018 2017 2016 2015 2014 Asbestos Beginning reserves $ 882 $ 856 $ 866 $ 884 $ 884 $ 912 $ 960 $ 1,014 $ 1,017 Incurred claims and claims expense - 44 - - 44 61 67 39 87 Claims and claims expense paid (16) (18) (10) (18) (62) (89) (115) (93) (90) Ending reserves $ 866 $ 882 $ 856 $ 866 $ 866 $ 884 $ 912 $ 960 $ 1,014 Claims and claims expense paid as a percent of ending reserves 1.8% 2.0% 1.2% 2.1% 7.2% 10.1% 12.6% 9.7% 8.9% Environmental Beginning reserves $ 174 $ 159 $ 162 $ 166 $ 166 $ 179 $ 179 $ 203 $ 208 Incurred claims and claims expense - 20 - - 20 10 23 1 15 Claims and claims expense paid (4) (5) (3) (4) (16) (23) (23) (25) (20) Ending reserves $ 170 $ 174 $ 159 $ 162 $ 170 $ 166 $ 179 $ 179 $ 203 Claims and claims expense paid as a percent of ending reserves 2.4% 2.9% 1.9% 2.5% 9.4% 13.9% 12.8% 14.0% 9.9% Other (1) Beginning reserves $ 356 $ 348 $ 351 $ 357 $ 357 $ 354 $ 377 $ 395 $ 421 Incurred claims and claims expense 3 15 2 3 23 25 15 13 11 Claims and claims expense paid (4) (7) (5) (9) (25) (22) (38) (31) (37) Ending reserves $ 355 $ 356 $ 348 $ 351 $ 355 $ 357 $ 354 $ 377 $ 395 Claims and claims expense paid as a percent of ending reserves 1.1% 2.0% 1.4% 2.6% 7.0% 6.2% 10.7% 8.2% 9.4% Total (2) Beginning reserves $ 1,412 $ 1,363 $ 1,379 $ 1,407 $ 1,407 $ 1,445 $ 1,516 $ 1,612 $ 1,646 Incurred claims and claims expense 3 79 2 3 87 96 105 53 113 Claims and claims expense paid (24) (30) (18) (31) (103) (134) (176) (149) (147) Ending reserves $ 1,391 $ 1,412 $ 1,363 $ 1,379 $ 1,391 $ 1,407 $ 1,445 $ 1,516 $ 1,612 Claims and claims expense paid as a percent of ending reserves 1.7% 2.1% 1.3% 2.2% 7.4% 9.5% 12.2% 9.8% 9.1% (1) Other includes other mass torts, workers' compensation, commercial and other. (2) The 3-year survival ratio for the combined asbestos, environmental and other claims was 10.1, 9.2, 9.2, 10.6 and 12.0 for 2018, 2017, 2016, 2015 and 2014, respectively, and is calculated by taking the ending reserves divided by net payments made during the year. The Allstate Corporation 4Q18 Supplement 32

 
The Allstate Corporation Service Businesses Segment Results (1) ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Service Businesses Net premiums written $ 489 $ 358 $ 297 $ 287 $ 309 $ 272 $ 259 $ 254 $ 1,431 $ 1,094 Net premiums earned $ 285 $ 275 $ 271 $ 267 $ 231 $ 225 $ 211 $ 200 $ 1,098 $ 867 Intersegment insurance premiums and service fees 33 31 29 29 28 26 28 28 122 110 Other revenue 34 16 16 16 16 17 17 16 82 66 Net investment income 9 7 6 5 5 4 4 3 27 16 Realized capital gains and losses (5) - (2) (4) - - - - (11) - Claims and claims expense (79) (90) (89) (93) (90) (106) (83) (90) (351) (369) Amortization of deferred policy acquisition costs (122) (118) (113) (110) (79) (78) (71) (68) (463) (296) Operating costs and expenses (149) (125) (118) (119) (132) (115) (116) (104) (511) (467) Amortization of purchased intangible assets (33) (20) (20) (21) (23) (23) (23) (23) (94) (92) Restructuring and related charges (3) - - (1) (11) (1) (1) - (4) (13) Income tax benefit 6 3 4 7 150 19 11 13 20 193 Net (loss) income applicable to common shareholders $ (24) $ (21) $ (16) $ (24) $ 95 $ (32) $ (23) $ (25) $ (85) $ 15 Realized capital gains and losses, after-tax 4 1 1 3 - - - - 9 - Amortization of purchased intangible assets, after-tax 26 16 16 16 15 15 15 15 74 60 Tax Legislation expense (benefit) - 4 - - (134) - - - 4 (134) Adjusted net income (loss) $ 6 $ - $ 1 $ (5) $ (24) $ (17) $ (8) $ (10) $ 2 $ (59) (1) Service Businesses results include SquareTrade, Arity, InfoArmor, Allstate Roadside Services and Allstate Dealer Services. SquareTrade results are on page 34 and other service businesses segment results are on page 35. The Allstate Corporation 4Q18 Supplement 33

 
The Allstate Corporation SquareTrade Results ($ in millions) As of or for the three months ended As of or for the twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Net premiums written $ 323 $ 194 $ 126 $ 130 $ 156 $ 104 $ 85 $ 81 $ 773 (3) $ 426 Net premiums earned $ 134 (4) $ 125 (4) $ 121 (4) $ 123 (4) $ 88 $ 78 $ 70 $ 59 $ 503 $ 295 Other revenue 3 (5) - - - 1 - - - 3 (5) 1 Net investment income 4 2 2 1 1 - - - 9 1 Realized capital gains and losses (4) 1 (1) (2) - - - - (6) - Claims and claims expense (32) (37) (39) (41) (37) (40) (29) (36) (6) (149) (142) Amortization of deferred policy acquisition costs (50) (4) (47) (4) (45) (4) (45) (4) (13) (11) (10) (8) (187) (42) Other costs and expenses (47) (38) (32) (35) (45) (33) (30) (27) (152) (135) Amortization of purchased intangible assets (20) (20) (20) (21) (23) (23) (23) (23) (81) (92) Restructuring and related charges - - - - (11) - - - - (11) Income tax benefit 2 1 3 4 75 10 8 12 10 105 Net (loss) income applicable to common shareholders $ (10) $ (13) $ (11) $ (16) $ 36 $ (19) $ (14) $ (23) $ (50) $ (20) Realized capital gains and losses, after-tax 3 - - 2 - - - - 5 - Amortization of purchased intangible assets, after-tax 16 16 16 16 15 15 15 15 64 60 Tax Legislation expense (benefit) - 4 - - (62) - - - 4 (62) Adjusted net income (loss) $ 9 $ 7 $ 5 $ 2 $ (11) $ (4) $ 1 $ (8) $ 23 $ (22) Fair value adjustments, after-tax (1) 2 2 2 2 3 2 3 4 8 12 Adjusted net income (loss), excluding purchase accounting adjustments * $ 11 $ 9 $ 7 $ 4 $ (8) $ (2) $ 4 $ (4) $ 31 $ (10) Protection Plans in Force (in thousands) (2) 68,588 52,151 44,459 41,806 38,719 34,078 31,258 29,907 68,588 (3) 38,719 New Issued Protection Plans (in thousands) 22,110 11,120 5,319 5,564 8,210 5,122 3,586 3,840 44,113 (3) 20,758 (1) In connection with the acquisition, purchase accounting adjustments made to record the acquired assets and liabilities at their fair value for unearned premiums, contractual liability insurance policy premium expenses, and commissions paid to retailers recorded as of the acquisition date are recognized over the life of the in force contracts or approximately three years. (2) Protection plan terms generally range between one and five years with an average term of three years. (3) Includes the addition of a leading U.S. retailer in the second half of 2018. (4) As a result of the adoption of the revenue from contracts with customers accounting standard on January 1, 2018, SquareTrade recognized $21 million, $24 million, $26 million and $30 million in the fourth, third, second and first quarter of 2018, respectively, of net premiums earned with a corresponding increase in amortization of deferred policy acquisition costs related to protection plans sold directly to retailers prior to January 1, 2018, for which SquareTrade is deemed to be the principal in the transaction. (5) Other revenue relates to the acquisition of PlumChoice. (6) Includes a $6 million favorable adjustment for loss experience. The Allstate Corporation 4Q18 Supplement 34

 
The Allstate Corporation Other Service Businesses Segment Results ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Arity (1) Intersegment service fees $ 24 $ 22 $ 21 $ 21 $ 20 $ 19 $ 20 $ 20 $ 88 $ 79 Operating costs and other expenses (28) (26) (25) (26) (25) (26) (27) (19) (105) (97) Income tax benefit (expense) 1 - 1 1 (3) 3 1 - 3 1 Net (loss) income applicable to common shareholders $ (3) $ (4) $ (3) $ (4) $ (8) $ (4) $ (6) $ 1 $ (14) $ (17) Tax Legislation expense - - - - 2 - - - - 2 Adjusted net (loss) income $ (3) $ (4) $ (3) $ (4) $ (6) $ (4) $ (6) $ 1 $ (14) $ (15) InfoArmor (1)(2) Other revenue $ 16 $ - $ - $ - $ - $ - $ - $ - $ 16 $ - Operating costs and other expenses (14) - - - - - - - (14) - Amortization of purchased intangible assets (13) - - - - - - - (13) - Income tax benefit 2 - - - - - - - 2 - Net loss applicable to common shareholders (9) - - - - - - - (9) - Amortization of purchased intangible assets, after-tax 10 - - - - - - - 10 - Adjusted net income $ 1 $ - $ - $ - $ - $ - $ - $ - $ 1 $ - Allstate Roadside Services Net premiums written $ 61 $ 65 $ 68 $ 65 $ 60 $ 68 $ 66 $ 69 $ 259 $ 263 Net premiums earned $ 65 $ 66 $ 68 $ 64 $ 64 $ 69 $ 67 $ 68 $ 263 $ 268 Intersegment insurance premiums and service fees 9 9 8 8 8 7 8 8 34 31 Other revenue 1 1 1 2 1 2 2 2 5 7 Net investment income - 1 - - - 1 - - 1 1 Realized capital gains and losses (1) - - - - - - - (1) - Claims and claims expense (36) (38) (36) (35) (35) (38) (35) (32) (145) (140) Amortization of deferred policy acquisition costs (1) (1) (2) (1) (4) (4) (4) (6) (5) (18) Operating costs and other expenses (43) (46) (45) (44) (45) (44) (45) (44) (178) (178) Restructuring and related charges (3) - - (1) - (1) (1) - (4) (2) Income tax benefit 1 2 1 2 8 3 3 1 6 15 Net loss applicable to common shareholders $ (8) $ (6) $ (5) $ (5) $ (3) $ (5) $ (5) $ (3) $ (24) $ (16) Realized capital gains and losses, after-tax 1 - - - - - - - 1 - Tax Legislation benefit - - - - (4) - - - - (4) Adjusted net loss $ (7) $ (6) $ (5) $ (5) $ (7) $ (5) $ (5) $ (3) $ (23) $ (20) Allstate Dealer Services Net premiums written $ 105 $ 99 $ 103 $ 92 $ 93 $ 100 $ 108 $ 104 $ 399 $ 405 Net premiums earned $ 86 $ 84 $ 82 $ 80 $ 79 $ 78 $ 74 $ 73 $ 332 $ 304 Other revenue 14 15 15 14 14 15 15 14 58 58 Net investment income 5 4 4 4 4 3 4 3 17 14 Realized capital gains and losses - (1) (1) (2) - - - - (4) - Claims and claims expense (11) (15) (14) (17) (18) (27) (20) (22) (57) (87) Amortization of deferred policy acquisition costs (71) (70) (66) (64) (62) (63) (57) (54) (271) (236) Operating costs and other expenses (17) (15) (16) (14) (17) (13) (13) (14) (62) (57) Income tax (expense) benefit - - (1) - 70 3 (1) - (1) 72 Net income (loss) applicable to common shareholders $ 6 $ 2 $ 3 $ 1 $ 70 $ (4) $ 2 $ - $ 12 $ 68 Realized capital gains and losses, after-tax - 1 1 1 - - - - 3 - Tax Legislation benefit - - - - (70) - - - - (70) Adjusted net income (loss) $ 6 $ 3 $ 4 $ 2 $ - $ (4) $ 2 $ - $ 15 $ (2) (1) There are no premiums written or earned for Arity or InfoArmor. (2) InfoArmor, a leading provider of identity protection in the employee benefits market, was acquired on October 5, 2018 and therefore is only included in the Service Businesses segment results for the three months ended December 31, 2018. The Allstate Corporation 4Q18 Supplement 35

 
The Allstate Corporation Allstate Life Segment Results and Other Statistics ($ in millions) As of or for the three months ended As or for the twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Premiums $ 158 $ 149 $ 149 $ 146 $ 149 $ 141 $ 140 $ 140 $ 602 $ 570 Contract charges 182 173 177 181 175 175 179 181 713 710 Other revenue (1) 35 30 28 26 33 26 28 27 119 114 Net investment income 125 128 130 122 127 119 123 120 505 489 Contract benefits (216) (193) (195) (205) (210) (173) (187) (195) (809) (765) Interest credited to contractholder funds (72) (72) (71) (70) (71) (71) (71) (69) (285) (282) Amortization of deferred policy acquisition costs (24) (36) (31) (31) (27) (25) (35) (32) (122) (119) Operating costs and expenses (105) (90) (88) (86) (98) (82) (86) (86) (369) (352) Restructuring and related charges - (1) (2) - (1) (1) - - (3) (2) Income tax expense on operations (15) (14) (19) (14) (20) (35) (28) (27) (62) (110) Adjusted net income 68 74 78 69 57 74 63 59 289 253 Realized capital gains and losses, after-tax (4) (3) (2) (2) - 1 - 1 (11) 2 DAC and DSI amortization relating to realized capital gains and losses, after-tax (2) (1) (3) (2) (2) (2) (3) (3) (8) (10) Tax Legislation (expense) benefit - (16) - - 332 - - - (16) 332 Net income applicable to common shareholders $ 62 $ 54 $ 73 $ 65 $ 387 $ 73 $ 60 $ 57 $ 254 $ 577 Premiums and Contract Charges by Product Traditional life insurance premiums $ 157 $ 149 $ 148 $ 146 $ 148 $ 141 $ 139 $ 140 $ 600 $ 568 Accident and health insurance premiums 1 - 1 - 1 - 1 - 2 2 Interest-sensitive life insurance contract charges 182 173 177 181 175 175 179 181 713 710 Total $ 340 $ 322 $ 326 $ 327 $ 324 $ 316 $ 319 $ 321 $ 1,315 $ 1,280 Proprietary Life Issued Policies (2) 46,421 35,454 37,021 30,479 47,917 34,314 36,272 30,281 149,375 148,784 Policies in Force (in thousands) (3) Life insurance Allstate agencies 1,831 1,820 1,819 1,816 1,822 1,808 1,806 1,802 1,831 1,822 Closed channels 189 196 198 200 202 208 211 212 189 202 Accident and health insurance 2 2 2 2 2 3 3 3 2 2 Total 2,022 2,018 2,019 2,018 2,026 2,019 2,020 2,017 2,022 2,026 (1) Includes gross dealer concessions received in connection with Allstate exclusive agencies and exclusive financial specialist's sales of non-proprietary products, including mutual funds, fixed and variable annuities, disability insurance and long-term care insurance. (2) Policies issued during the period. (3) Reflect the number of contracts in force. The Allstate Corporation 4Q18 Supplement 36

 
The Allstate Corporation Allstate Life Analysis of Net Income ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Benefit spread Premiums $ 158 $ 149 $ 149 $ 146 $ 149 $ 141 $ 140 $ 140 $ 602 $ 570 Cost of insurance contract charges (1) 127 119 121 126 119 121 123 124 493 487 Contract benefits (216) (193) (195) (205) (210) (173) (187) (195) (809) (765) Total benefit spread 69 75 75 67 58 89 76 69 286 292 Investment spread Net investment income 125 128 130 122 127 119 123 120 505 489 Interest credited to contractholder funds (72) (72) (71) (70) (71) (71) (71) (69) (285) (282) Total investment spread 53 56 59 52 56 48 52 51 220 207 Surrender charges and contract maintenance expense fees (1) 55 54 56 55 56 54 56 57 220 223 Other revenue 35 30 28 26 33 26 28 27 119 114 Realized capital gains and losses (5) (3) (3) (3) 1 2 1 1 (14) 5 Amortization of deferred policy acquisition costs (26) (38) (35) (33) (30) (29) (39) (36) (132) (134) Operating costs and expenses (105) (90) (88) (86) (98) (82) (86) (86) (369) (352) Restructuring and related charges - (1) (2) - (1) (1) - - (3) (2) Income tax (expense) benefit (14) (29) (17) (13) 312 (34) (28) (26) (73) 224 Net income applicable to common shareholders $ 62 $ 54 $ 73 $ 65 $ 387 $ 73 $ 60 $ 57 $ 254 $ 577 (1) Reconciliation of contract charges Cost of insurance contract charges $ 127 $ 119 $ 121 $ 126 $ 119 $ 121 $ 123 $ 124 $ 493 $ 487 Surrender charges and contract maintenance expense fees 55 54 56 55 56 54 56 57 220 223 Total contract charges $ 182 $ 173 $ 177 $ 181 $ 175 $ 175 $ 179 $ 181 $ 713 $ 710 The Allstate Corporation 4Q18 Supplement 37

 
The Allstate Corporation Allstate Life Return on Equity ($ in millions) Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, 2018 2018 2018 2018 2017 Return on Equity Numerator: Net income applicable to common shareholders (1)(2) $ 254 $ 579 $ 598 $ 585 $ 577 Denominator: Beginning equity $ 2,591 (3) Ending equity 2,441 $ 2,496 $ 2,556 $ 2,513 $ 2,591 Average Equity (4) $ 2,516 Return on equity 10.1 % 23.2 % 23.4 % 23.3 % 22.3 % Adjusted Net Income Return on Adjusted Equity * Numerator: (1) Adjusted net income $ 289 $ 278 $ 278 $ 263 $ 253 Denominator: Beginning equity $ 2,591 Less: Unrealized net capital gains and losses 234 Goodwill 175 Adjusted beginning equity $ 2,182 Ending equity (3) $ 2,441 $ 2,496 $ 2,556 $ 2,513 $ 2,591 Less: Unrealized net capital gains and losses 53 75 88 142 234 Goodwill 175 175 175 175 175 Adjusted ending equity $ 2,213 $ 2,246 $ 2,293 $ 2,196 $ 2,182 Average adjusted equity (4) $ 2,198 Adjusted net income return on adjusted equity * 13.2 % 12.4 % 12.1 % 12.0 % 11.6 % (1) Net income applicable to common shareholders and adjusted net income reflect a trailing twelve-month period. (2) Includes a $16 million Tax Legislation expense for the period ended December 31, 2018, a $316 million benefit for the period ended September 30, 2018, and a $332 million benefit for all other periods presented. (3) For the periods ended September 30, 2018, June 30, 2018, March 31, 2018 and December 31, 2017, ending equity has been used due to the changes in reportable segments that were effective October 2017. (4) Average equity and average adjusted equity are determined using a two-point average, with the beginning and ending equity and adjusted equity, respectively, for the twelve-month period as data points. The Allstate Corporation 4Q18 Supplement 38

 
The Allstate Corporation Allstate Life Reserves and Contractholder Funds ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Reserve for life-contingent contract benefits Traditional life insurance $ 2,539 $ 2,507 $ 2,482 $ 2,467 $ 2,460 $ 2,426 $ 2,420 $ 2,405 $ 2,539 $ 2,460 Accident and health insurance 138 165 169 170 176 178 180 179 138 176 Total $ 2,677 $ 2,672 $ 2,651 $ 2,637 $ 2,636 $ 2,604 $ 2,600 $ 2,584 $ 2,677 $ 2,636 Contractholders funds, beginning balance $ 7,650 $ 7,630 $ 7,603 $ 7,608 $ 7,559 $ 7,514 $ 7,497 $ 7,464 $ 7,608 $ 7,464 Deposits 250 237 238 240 243 236 243 251 965 973 Interest credited 72 71 71 70 71 71 70 70 284 282 Benefits, withdrawals and other adjustments Benefits (58) (59) (56) (59) (58) (54) (66) (63) (232) (241) Surrenders and partial withdrawals (63) (64) (65) (67) (64) (62) (63) (65) (259) (254) Contract charges (177) (176) (175) (176) (177) (175) (176) (176) (704) (704) Net transfers from separate accounts 1 1 2 2 1 - 2 1 6 4 Other adjustments (19) 10 12 (15) 33 29 7 15 (12) 84 Total benefits, withdrawals and other adjustments (316) (288) (282) (315) (265) (262) (296) (288) (1,201) (1,111) Contractholder funds, ending balance $ 7,656 $ 7,650 $ 7,630 $ 7,603 $ 7,608 $ 7,559 $ 7,514 $ 7,497 $ 7,656 $ 7,608 The Allstate Corporation 4Q18 Supplement 39

 
The Allstate Corporation Allstate Benefits Segment Results and Other Statistics ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Premiums $ 253 $ 259 $ 254 $ 258 $ 244 $ 244 $ 241 $ 241 $ 1,024 $ 970 Contract charges 28 26 29 28 29 29 28 28 111 114 Net investment income 20 19 19 19 18 18 19 17 77 72 Contract benefits (144) (159) (143) (149) (143) (142) (143) (136) (595) (564) Interest credited to contractholder funds (10) (8) (9) (8) (9) (8) (9) (9) (35) (35) Amortization of deferred policy acquisition costs (43) (26) (36) (41) (37) (31) (33) (41) (146) (142) Operating costs and expenses (73) (70) (70) (72) (70) (65) (64) (67) (285) (266) Restructuring and related charges - - - - (2) (1) - - - (3) Income tax expense on operations (6) (9) (10) (7) (10) (16) (14) (11) (32) (51) Adjusted net income 25 32 34 28 20 28 25 22 119 95 Realized capital gains and losses, after-tax (7) 2 - (2) (1) 1 - - (7) - DAC and DSI amortization relating to realized capital gains and losses, after-tax 1 - - - - - - - 1 - Tax Legislation benefit - - - - 51 - - - - 51 Net income applicable to common shareholders $ 19 $ 34 $ 34 $ 26 $ 70 $ 29 $ 25 $ 22 $ 113 $ 146 Benefit ratio (1) 51.2 55.8 50.5 52.1 52.4 52.0 53.2 50.6 52.4 52.0 Operating expense ratio (2) 26.0 24.6 24.7 25.2 25.6 23.8 23.8 24.9 25.1 24.5 (1) Benefit ratio is contract benefits divided by premiums and contract charges. (2) Operating expense ratio is operating costs and expenses divided by premiums and contract charges. The Allstate Corporation 4Q18 Supplement 40

 
The Allstate Corporation Allstate Benefits Segment Premium and Other Statistics ($ in millions) As of or for the three months ended As of or for the twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Premiums and Contract Charges by Product Life $ 40 $ 39 $ 38 $ 38 $ 40 $ 41 $ 37 $ 37 $ 155 $ 155 Accident 73 75 75 74 68 70 71 71 297 280 Critical illness 117 119 119 121 117 116 116 119 476 468 Short-term disability 27 27 27 27 26 27 25 24 108 102 Other health 24 25 24 26 22 19 20 18 99 79 Total $ 281 $ 285 $ 283 $ 286 $ 273 $ 273 $ 269 $ 269 $ 1,135 $ 1,084 New Annualized Premium Sales by Product (1) Life $ 16 $ 10 $ 11 $ 8 $ 18 $ 10 $ 11 $ 9 $ 45 $ 48 Accident 49 22 20 21 55 21 21 25 112 122 Critical illness 63 22 23 25 74 22 23 28 133 147 Short-term disability 13 9 7 10 13 9 10 29 39 61 Other health 28 10 10 12 35 7 8 16 60 66 Total $ 169 $ 73 $ 71 $ 76 $ 195 $ 69 $ 73 $ 107 $ 389 $ 444 (2) Annualized Premium in Force $ 1,225 $ 1,234 $ 1,245 $ 1,237 $ 1,185 $ 1,187 $ 1,193 $ 1,179 $ 1,225 $ 1,185 Policies in Force (in thousands) (3) Life insurance 457 464 469 468 458 460 466 462 457 458 Accident and health insurance 3,751 3,777 3,814 3,792 3,575 3,575 3,598 3,530 3,751 3,575 Total 4,208 4,241 4,283 4,260 4,033 4,035 4,064 3,992 4,208 4,033 (1) New annualized premium sales reflects annualized premiums at initial customer enrollment (including new accounts and new employees or policies of existing accounts). A significant portion of Allstate Benefits business is seasonally written in the fourth quarter during many clients’ annual employee benefits enrollment. (2) Premium amount paid annually for all active policies, which have not been cancelled. (3) Individual life and accident and health insurance policies reflect the number of contracts in force. Group life and accident and health insurance reflect certificate counts as opposed to group counts. The Allstate Corporation 4Q18 Supplement 41

 
The Allstate Corporation Allstate Benefits Return on Equity ($ in millions) Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, 2018 2018 2018 2018 2017 Return on Equity Numerator: Net income applicable to common shareholders (1)(2) $ 113 $ 164 $ 159 $ 150 $ 146 Denominator: Beginning Equity $ 801 (3) Ending equity 818 $ 859 $ 826 $ 803 $ 801 (4) Average equity $ 810 Return on equity 14.0 % 19.1 % 19.2 % 18.7 % 18.2 % Adjusted Net Income Return on Adjusted Equity * Numerator: (1) Adjusted net income $ 119 $ 114 $ 110 $ 101 $ 95 Beginning equity $ 801 Less: Unrealized net capital gains and losses 57 Goodwill 96 Adjusted beginning equity $ 648 Denominator: Ending equity (3) $ 818 $ 859 $ 826 $ 803 $ 801 Less: Unrealized net capital gains and losses (11) (4) (3) 8 57 Goodwill 96 96 96 96 96 Adjusted ending equity $ 733 $ 767 $ 733 $ 699 $ 648 Average adjusted equity (4) $ 691 Adjusted net income return on adjusted equity * 17.2 % 14.9 % 15.0 % 14.4 % 14.7 % (1) Net income applicable to common shareholders and adjusted net income reflect a trailing twelve-month period. (2) Includes a $51 million Tax Legislation benefit for the periods ended September 30, 2018, June 30, 2018, March 31, 2018 and December 31, 2017. (3) For the periods ended September 30, 2018, June 30, 2018, March 31, 2018 and December 31, 2017, ending equity has been used due to the changes in reportable segments that were effective October 2017. (4) Average equity and average adjusted equity are determined using a two-point average, with the beginning and ending equity and adjusted equity, respectively, for the twelve-month period as data points. The Allstate Corporation 4Q18 Supplement 42

 
The Allstate Corporation Allstate Annuities Segment Results and Other Statistics ($ in millions) As of or for the three months ended As of or for the twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Contract charges $ 4 $ 5 $ 3 $ 3 $ 4 $ 4 $ 3 $ 3 $ 15 $ 14 Net investment income 253 260 293 290 338 324 354 289 1,096 1,305 Contract benefits (128) (146) (145) (150) (154) (141) (156) (143) (569) (594) Interest credited to contractholder funds (80) (83) (87) (87) (90) (94) (93) (95) (337) (372) Amortization of deferred policy acquisition costs (2) (2) (2) (1) (2) (2) (1) (2) (7) (7) Operating costs and expenses (6) (8) (9) (9) (9) (9) (8) (9) (32) (35) Restructuring and related charges - - - - - 1 (1) - - - Income tax expense on operations (10) (6) (9) (11) (32) (28) (33) (14) (36) (107) Adjusted net income 31 20 44 35 55 55 65 29 130 204 Realized capital gains and losses, after-tax (153) 40 5 (23) 22 11 (3) (2) (131) 28 Valuation changes on embedded derivatives not hedged, after-tax (2) 1 - 4 2 (1) (1) - 3 - Gain on disposition of operations, after-tax 1 1 1 1 1 1 - 2 4 4 Tax Legislation benefit - 69 - - 182 - - - 69 182 Net (loss) income applicable to common shareholders $ (123) $ 131 $ 50 $ 17 $ 262 $ 66 $ 61 $ 29 $ 75 $ 418 Policies in Force (in thousands) (1) Deferred annuities 127 130 133 137 142 145 148 152 127 142 Immediate annuities 84 85 87 88 89 91 92 94 84 89 211 215 220 225 231 236 240 246 211 231 (1) Allstate Annuities in force reflect the number of contracts in force excluding sold blocks of business that remain on the balance sheet due to the dispositions of the business being effected through reinsurance arrangements. The Allstate Corporation 4Q18 Supplement 43

 
The Allstate Corporation Allstate Annuities Analysis of Net Income ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Benefit spread Cost of insurance contract charges (1) $ 3 $ 3 $ 1 $ 2 $ 3 $ 3 $ 1 $ 2 $ 9 $ 9 Contract benefits excluding the implied interest on immediate annuities with life contingencies (2) (6) (23) (22) (26) (29) (17) (30) (17) (77) (93) Total benefit spread (3) (20) (21) (24) (26) (14) (29) (15) (68) (84) Investment spread Net investment income (3) 253 260 293 290 338 324 354 289 1,096 1,305 Implied interest on immediate annuities with life contingencies (2) (122) (123) (123) (124) (125) (124) (126) (126) (492) (501) Interest credited to contractholder funds (83) (83) (85) (83) (88) (95) (95) (95) (334) (373) Total investment spread 48 54 85 83 125 105 133 68 270 431 Surrender charges and contract maintenance expense fees (1) 1 2 2 1 1 1 2 1 6 5 Realized capital gains and losses (194) 51 6 (29) 33 18 (5) (2) (166) 44 Amortization of deferred policy acquisition costs (2) (2) (2) (1) (2) (2) (1) (2) (7) (7) Operating costs and expenses (6) (8) (9) (9) (9) (9) (8) (9) (32) (35) Restructuring and related charges - - - - - 1 (1) - - - Gain on disposition of operations 2 1 2 1 1 1 2 2 6 6 Income tax benefit (expense) 31 53 (13) (5) 139 (35) (32) (14) 66 58 Net income applicable to common shareholders $ (123) $ 131 $ 50 $ 17 $ 262 $ 66 $ 61 $ 29 $ 75 $ 418 (1) Reconciliation of contract charges Cost of insurance contract charges $ 3 $ 3 $ 1 $ 2 $ 3 $ 3 $ 1 $ 2 $ 9 $ 9 Surrender charges and contract maintenance expense fees 1 2 2 1 1 1 2 1 6 5 Total contract charges $ 4 $ 5 $ 3 $ 3 $ 4 $ 4 $ 3 $ 3 $ 15 $ 14 (2) Reconciliation of contract benefits Contract benefits excluding the implied interest on immediate annuities with life contingencies $ (6) $ (23) $ (22) $ (26) $ (29) $ (17) $ (30) $ (17) $ (77) $ (93) Implied interest on immediate annuities with life contingencies (122) (123) (123) (124) (125) (124) (126) (126) (492) (501) Total contract benefits $ (128) $ (146) $ (145) $ (150) $ (154) $ (141) $ (156) $ (143) $ (569) $ (594) (3) Performance-based net investment income $ 64 $ 72 $ 92 $ 97 $ 142 $ 115 $ 137 $ 69 $ 325 $ 463 The Allstate Corporation 4Q18 Supplement 44

 
The Allstate Corporation Allstate Annuities Return on Equity ($ in millions) Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, 2018 2018 2018 2018 2017 Return on Equity Numerator: (1)(2) Net income applicable to common shareholders $ 75 $ 460 $ 395 $ 406 $ 418 Denominator: Beginning equity $ 4,947 (3) Ending equity 4,944 $ 5,115 $ 5,025 $ 5,005 $ 4,947 Average equity (4) $ 4,946 Return on equity 1.5 % 9.0 % 7.9 % 8.1 % 8.4 % Adjusted Net Income Return on Adjusted Equity * Numerator: (1) Adjusted net income $ 130 $ 154 $ 189 $ 210 $ 204 Denominator: Beginning equity $ 4,947 Less: Unrealized net capital gains and losses 607 Adjusted beginning equity $ 4,340 Ending equity (3) $ 4,944 $ 5,115 $ 5,025 $ 5,005 $ 4,947 Less: Unrealized net capital gains and losses 193 241 272 278 607 Adjusted ending equity $ 4,751 $ 4,874 $ 4,753 $ 4,727 $ 4,340 Average adjusted equity (4) $ 4,546 Adjusted net income return on adjusted equity * 2.9 % 3.2 % 4.0 % 4.4 % 4.7 % Adjusted net income return on adjusted equity by product: Deferred annuities 10.5 % 10.2 % 11.1 % 10.5 % 11.3 % Immediate annuities 1.9 % 2.4 % 3.2 % 3.7 % 3.8 % (1) Net income applicable to common shareholders and adjusted net income reflect a trailing twelve-month period. (2) Includes a $69 million Tax Legislation benefit for the period ended December 31, 2018, a $251 million benefit for the period ended September 30, 2018, and a $182 million benefit for all other periods presented. (3 For the periods ended September 30, 2018, June 30, 2018, March 31, 2018 and December 31, 2017, ending equity has been used due to the changes in reportable segments that were effective October 2017. (4) Average equity and average adjusted equity are determined using a two-point average, with the beginning and ending equity and adjusted equity, respectively, for the twelve-month period as data points. The Allstate Corporation 4Q18 Supplement 45

 
The Allstate Corporation Allstate Annuities Reserves and Contractholder Funds ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Reserve for life-contingent contract benefits Immediate fixed annuities with life contingencies: Sub-standard structured settlements and group pension terminations (1) $ 4,990 $ 5,010 $ 5,011 $ 5,135 $ 5,284 $ 5,027 $ 5,034 $ 5,033 $ 4,990 $ 5,284 Standard structured settlements and SPIA (2) 3,425 3,443 3,469 3,491 3,565 3,525 3,545 3,559 3,425 3,565 Subtotal (3) 8,415 8,453 8,480 8,626 8,849 8,552 8,579 8,592 8,415 8,849 Other 109 82 87 81 85 92 95 101 109 85 Total $ 8,524 $ 8,535 $ 8,567 $ 8,707 $ 8,934 $ 8,644 $ 8,674 $ 8,693 $ 8,524 $ 8,934 Contractholder funds Deferred fixed annuities $ 7,156 $ 7,423 $ 7,630 $ 7,883 $ 8,128 $ 8,341 $ 8,523 $ 8,722 $ 7,156 $ 8,128 Immediate fixed annuities without life contingencies (4) 2,525 2,568 2,620 2,656 2,700 2,744 2,792 2,831 2,525 2,700 Other 136 107 109 104 108 119 113 116 136 108 Total $ 9,817 $ 10,098 $ 10,359 $ 10,643 $ 10,936 $ 11,204 $ 11,428 $ 11,669 $ 9,817 $ 10,936 Contractholders funds, beginning balance $ 10,098 $ 10,359 $ 10,643 $ 10,936 $ 11,204 $ 11,428 $ 11,669 $ 11,915 $ 10,936 $ 11,915 Deposits 3 3 5 4 5 6 6 11 15 28 Interest credited 83 82 84 82 88 94 94 94 331 370 Benefits, withdrawals and other adjustments Benefits (135) (148) (148) (156) (149) (163) (160) (166) (587) (638) Surrenders and partial withdrawals (229) (197) (227) (201) (197) (165) (180) (181) (854) (723) Contract charges (3) (3) (1) (2) (3) (3) (1) (2) (9) (9) Net transfers from separate accounts - - - - - - - 1 - 1 Other adjustments - 2 3 (20) (12) 7 - (3) (15) (8) Total benefits, withdrawals and other adjustments (367) (346) (373) (379) (361) (324) (341) (351) (1,465) (1,377) Contractholder funds, ending balance $ 9,817 $ 10,098 $ 10,359 $ 10,643 $ 10,936 $ 11,204 $ 11,428 $ 11,669 $ 9,817 $ 10,936 (1) Includes structured settlement annuities for severe injuries or other health impairments which significantly reduced their life expectancy at the time the annuity was issued and group annuity contracts issued to sponsors of terminated pension plans. (2) Includes life-contingent structured settlement annuities for annuitants with standard life expectancy and single premium immediate annuities with life contingencies. (3) To the extent that unrealized gains on fixed income securities would result in a premium deficiency had those gains actually been realized, a premium deficiency reserve is recorded for certain immediate annuities with life contingencies. Liabilities of $119 million and $315 million are included in the reserve for life-contingent contract benefits with respect to this deficiency as of March 31, 2018 and December 31, 2017, respectively. The offset to this liability is recorded as a reduction of the unrealized net capital gains included in accumulated other comprehensive income. The liability was zero for all other periods presented. (4) Includes period certain structured settlements and single premium immediate annuities without life contingencies. The Allstate Corporation 4Q18 Supplement 46

 
The Allstate Corporation Corporate and Other Segment Results ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Net investment income $ 15 $ 20 $ 23 $ 13 $ 10 $ 10 $ 10 $ 11 $ 71 $ 41 Operating costs and expenses (145) (1) (88) (1) (12) (8) (44) (1) (93) (1) (9) (8) (253) (154) Interest expense (81) (82) (86) (83) (84) (82) (83) (85) (332) (334) Income tax benefit on operations 52 32 19 17 43 60 31 30 120 164 Preferred stock dividends (43) (37) (39) (29) (29) (29) (29) (29) (148) (116) Adjusted net loss (202) (155) (95) (90) (104) (134) (80) (81) (542) (399) Realized capital gains and losses, after-tax (20) - (9) (1) (4) - - - (30) (4) Business combination expenses, after-tax (7) - - - - (1) - (13) (7) (14) Goodwill impairment - - - - (125) - - - - (125) Tax Legislation expense - (15) - - (128) - - - (15) (128) Net loss applicable to common shareholders $ (229) $ (170) $ (104) $ (91) $ (361) $ (135) $ (80) $ (94) $ (594) $ (670) (1) Includes a pension settlement loss of $111 million, $61 million, $36 million and $86 million for the three months ended December 31, 2018, September 30, 2018, December 31, 2017 and September 30, 2017, respectively. The Allstate Corporation 4Q18 Supplement 47

 
The Allstate Corporation Consolidated Investments ($ in millions) Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, 2018 2018 2018 2018 2017 2017 2017 2017 Consolidated Investments Fixed income securities, at fair value: Tax-exempt $ 7,000 $ 7,252 $ 7,396 $ 6,310 $ 6,010 $ 5,479 $ 5,520 $ 5,164 Taxable 50,170 50,411 49,495 50,364 52,982 53,912 53,136 53,472 Equity securities (1)(2) 5,036 6,965 6,888 6,986 6,621 6,434 6,117 5,685 Mortgage loans 4,670 4,592 4,535 4,679 4,534 4,322 4,336 4,349 Limited partnership interests (3) 7,505 7,602 7,679 7,434 6,740 6,600 6,206 5,982 Short-term, at fair value 3,027 3,071 3,123 3,424 1,944 2,198 2,175 2,753 Other 3,852 4,075 4,125 4,092 3,972 3,826 3,815 3,738 Total $ 81,260 $ 83,968 $ 83,241 $ 83,289 $ 82,803 $ 82,771 $ 81,305 $ 81,143 Fixed income securities, at amortized cost: Tax-exempt $ 6,994 $ 7,340 $ 7,438 $ 6,379 $ 6,011 $ 5,440 $ 5,482 $ 5,165 Taxable 50,140 50,278 49,312 49,830 51,514 52,168 51,419 52,029 Ratio of fair value to amortized cost 100.1 % 100.1 % 100.2 % 100.8 % 102.6 % 103.1 % 103.1 % 102.5 % Short-term, at amortized cost $ 3,027 $ 3,071 $ 3,123 $ 3,424 $ 1,944 $ 2,198 $ 2,175 $ 2,753 (1) Equity securities may include investments in exchange traded and mutual funds whose underlying investments are fixed income securities. (2) Due to the adoption of the recognition and measurement accounting standard on January 1, 2018, equity securities are measured at fair value with changes in fair value recognized in realized capital gains and losses. (3) As of December 31, 2018, we have commitments to invest in additional limited partnership interests totaling $3.03 billion. The Allstate Corporation 4Q18 Supplement 48

 
The Allstate Corporation Investments by Segment ($ in millions) As of December 31, 2018 Property- Service Allstate Allstate Allstate Corporate Liability Businesses Life Benefits Annuities and Other Total Investments by Segment Fixed income securities, at fair value: Tax-exempt $ 6,693 $ - $ - $ - $ 69 $ 238 $ 7,000 Taxable 25,450 981 7,463 1,224 14,173 879 50,170 Equity securities (1)(2) 3,488 131 40 51 1,299 27 5,036 Mortgage loans 390 - 1,867 205 2,208 - 4,670 Limited partnership interests 4,222 - - - 3,283 - 7,505 Short-term, at fair value 1,759 91 187 27 638 325 3,027 Other 1,632 - 1,252 302 666 - 3,852 Total $ 43,634 $ 1,203 $ 10,809 $ 1,809 $ 22,336 $ 1,469 $ 81,260 Fixed income securities, at amortized cost: Tax-exempt $ 6,693 $ - $ - $ - $ 69 $ 232 $ 6,994 Taxable 25,746 984 7,361 1,237 13,931 881 50,140 Ratio of fair value to amortized cost 99.1 % 99.7 % 101.4 % 98.9 % 101.7 % 100.4 % 100.1 % Short-term, at amortized cost $ 1,759 $ 91 $ 187 $ 27 $ 638 $ 325 $ 3,027 Fixed income securities portfolio duration (in years) (3) 4.10 3.57 5.61 4.79 4.16 2.98 4.29 (1) Equity securities may include investments in exchange traded and mutual funds whose underlying investments are fixed income securities. (2) Due to the adoption of the recognition and measurement accounting standard on January 1, 2018, equity securities are measured at fair value with changes in fair value recognized in realized capital gains and losses. (3) Duration measures the price sensitivity of assets and liabilities to changes in interest rates. The Allstate Corporation 4Q18 Supplement 49

 
The Allstate Corporation Unrealized Net Capital Gains and Losses by Type ($ in millions) December 31, 2018 September 30, 2018 June 30, 2018 Unrealized net Fair value Unrealized net Fair value Unrealized net Fair value capital gains Fair as a percent of capital gains Fair as a percent of capital gains Fair as a percent of and losses value amortized cost (1) and losses value amortized cost (1) and losses value amortized cost (1) Fixed income securities U.S. government and agencies $ 131 $ 5,517 102.4 % $ 9 $ 3,151 100.3 % $ 24 $ 3,206 100.8 % Municipal 206 9,169 102.3 99 9,415 101.1 174 9,628 101.8 Corporate (400) 40,136 99.0 (166) 42,662 99.6 (169) 41,415 99.6 Foreign government 8 747 101.1 - 854 100.0 9 926 101.0 Asset-backed securities ("ABS") (4) 1,045 99.6 - 979 100.0 1 1,085 100.1 Residential mortgage-backed securities ("RMBS") 87 464 123.1 96 500 123.8 96 520 122.6 Commercial mortgage-backed securities ("CMBS") 7 70 111.1 6 80 108.1 4 88 104.8 Redeemable preferred stock 1 22 104.8 1 22 104.8 2 23 109.5 Total fixed income securities 36 57,170 100.1 45 57,663 100.1 141 56,891 100.2 Equity securities (2) - 5,036 n/a - 6,965 n/a - 6,888 n/a Short-term investments - 3,027 100.0 - 3,071 100.0 - 3,123 100.0 Derivatives (3) 117 n/a (3) 108 n/a (3) 104 n/a EMA limited partnership interests (3) - n/a n/a 2 n/a n/a 3 n/a n/a Unrealized net capital gains and losses, pre-tax 33 44 141 Amounts recognized for: Insurance reserves (4) - - - DAC and DSI (5) (33) (62) (72) Amounts recognized (33) (62) (72) Deferred income taxes 2 2 (15) Unrealized net capital gains and losses, after-tax $ 2 $ (16) $ 54 March 31, 2018 December 31, 2017 September 30, 2017 Unrealized net Fair value Unrealized net Fair value Unrealized net Fair value capital gains Fair as a percent of capital gains Fair as a percent of capital gains Fair as a percent of and losses value amortized cost (1) and losses value amortized cost (1) and losses value amortized cost (1) Fixed income securities U.S. government and agencies $ 33 $ 3,406 101.0 % $ 36 $ 3,616 101.0 % $ 57 $ 3,900 101.5 % Municipal 165 8,569 102.0 275 8,328 103.4 310 7,794 104.1 Corporate 152 41,851 100.4 1,030 44,026 102.4 1,287 44,546 103.0 Foreign government 11 979 101.1 16 1,021 101.6 16 1,093 101.5 ABS 1 1,197 100.1 6 1,272 100.5 7 1,270 100.6 RMBS 97 550 121.4 98 578 120.4 99 611 119.3 CMBS 4 99 104.2 4 128 103.2 4 153 102.7 Redeemable preferred stock 2 23 109.5 2 23 109.5 3 24 114.3 Total fixed income securities 465 56,674 100.8 1,467 58,992 102.6 1,783 59,391 103.1 Equity securities (2) - 6,986 n/a 1,160 6,621 121.2 966 6,434 117.7 Short-term investments - 3,424 100.0 - 1,944 100.0 - 2,198 100.0 Derivatives (1) 103 n/a (1) 127 n/a (2) 101 n/a EMA limited partnership interests (3) 1 n/a n/a 1 n/a n/a - n/a n/a Unrealized net capital gains and losses, pre-tax 465 2,627 2,747 Amounts recognized for: Insurance reserves (4) (119) (315) - DAC and DSI (5) (109) (196) (203) Amounts recognized (228) (511) (203) Deferred income taxes (50) (454) (893) Unrealized net capital gains and losses, after-tax $ 187 $ 1,662 $ 1,651 (1) The comparison of percentages from period to period may be distorted by investment transactions such as sales, purchases and impairment write-downs. (2) Due to the adoption of the recognition and measurement accounting standard on January 1, 2018, equity securities are reported at fair value with changes in fair value recognized in realized capital gains and losses. (3) Unrealized net capital gains and losses for limited partnership interests represent the Company's share of EMA limited partnerships' other comprehensive income. Fair value and amortized cost are not applicable. (4) The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. This adjustment primarily relates to structured settlement annuities with life contingencies (a type of immediate fixed annuities). (5) The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized. The Allstate Corporation 4Q18 Supplement 50

 
The Allstate Corporation Net Investment Income, Yields and Realized Capital Gains and Losses (Pre-Tax) ($ in millions) Three months ended Twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Net Investment Income Fixed income securities $ 533 $ 527 $ 509 $ 508 $ 514 $ 519 $ 527 $ 518 $ 2,077 $ 2,078 Equity securities 40 35 61 34 44 37 49 44 170 174 Mortgage loans 54 52 60 51 49 52 50 55 217 206 Limited partnership interests ("LP") 142 210 173 180 293 223 253 120 705 889 Short-term 23 19 19 12 9 9 6 6 73 30 Other 67 71 68 66 62 58 60 56 272 236 Investment income, before expense 859 914 890 851 971 898 945 799 3,514 3,613 Less: Investment expense (1) (73) (70) (66) (65) (58) (55) (48) (51) (274) (212) Net investment income $ 786 $ 844 $ 824 $ 786 $ 913 $ 843 $ 897 $ 748 $ 3,240 $ 3,401 Interest-bearing investments (2) $ 659 $ 650 $ 639 $ 622 $ 623 $ 627 $ 631 $ 625 $ 2,570 $ 2,506 Equity securities 40 35 61 34 44 37 49 44 170 174 LP and other alternative investments (3) 160 229 190 195 304 234 265 130 774 933 Investment income, before expense $ 859 $ 914 $ 890 $ 851 $ 971 $ 898 $ 945 $ 799 $ 3,514 $ 3,613 Pre-Tax Yields (4) Fixed income securities 3.7 % 3.7 % 3.6 % 3.6 % 3.6 % 3.6 % 3.7 % 3.6 % 3.6 % 3.6 % Equity securities 3.2 2.3 4.1 2.5 3.2 2.7 3.8 3.5 3.1 3.3 Mortgage loans 4.6 4.6 5.2 4.4 4.4 4.8 4.6 4.9 4.7 4.7 Limited partnership interests 7.5 11.0 9.2 10.1 17.5 13.9 16.6 8.1 9.5 14.2 Total portfolio 4.1 4.4 4.3 4.1 4.8 4.5 4.7 4.0 4.2 4.5 Interest-bearing investments 3.9 3.8 3.8 3.7 3.7 3.7 3.8 3.7 3.8 3.7 Realized Capital Gains and Losses (Pre-tax) by Transaction Type Impairment write-downs (5) $ (4) $ (5) $ (4) $ (1) $ (8) $ (23) $ (28) $ (43) $ (14) $ (102) Change in intent write-downs (5) - - - - (5) (5) (22) (16) - (48) Net other-than-temporary impairment losses recognized in earnings (4) (5) (4) (1) (13) (28) (50) (59) (14) (150) Sales (5) (76) (22) (75) (42) 146 148 139 208 (215) 641 Valuation of equity investments (5) (840) 198 34 (83) - - - - (691) - Valuation and settlements of derivative instruments 26 5 20 (8) (6) (17) (8) (15) 43 (46) Total $ (894) $ 176 $ (25) $ (134) $ 127 $ 103 $ 81 $ 134 $ (877) $ 445 Total Return on Investment Portfolio (6) Net investment income 0.9 % 1.0 % 1.0 % 0.9 % 1.1 % 1.0 % 1.1 % 0.9 % 3.9 % 4.1 % Valuation-interest bearing (0.1) (0.1) (0.5) (1.3) (0.4) 0.2 0.5 0.3 (2.2) 0.5 Valuation-equity owned (1.0) 0.2 - (0.1) 0.4 0.3 0.2 0.4 (0.9) 1.3 Total (0.2) % 1.1 % 0.5 % (0.5) % 1.1 % 1.5 % 1.8 % 1.6 % 0.8 % 5.9 % (7) Average Investment Balances (in billions) $ 81.7 $ 82.4 $ 81.9 $ 81.0 $ 80.1 $ 79.4 $ 78.9 $ 79.5 $ 81.5 $ 79.6 (1) Includes $71 million and $40 million of investee level expenses (depreciation and asset level operating expenses) for the years ended December 31, 2018 and 2017, respectively and $28 million and $10 million of securities lending expenses (portion of reinvestment income on securities lending collateral paid to counterparties) for the years ended December 31, 2018 and 2017, respectively. (2) Comprised of fixed income securities, mortgage loans, short-term investments, and other investments including bank and agent loans and derivatives. (3) Comprised of limited partnership interests and other alternative investments, including real estate investments classified as other investments. (4) Quarterly pre-tax yield is calculated as annualized quarterly investment income, before investment expense divided by the average of the current and prior quarter investment balances. Year-to-date pre-tax yield is calculated as annualized year-to-date investment income, before investment expense divided by the average of investment balances at the beginning of the year and the end of each quarter during the year. For the purposes of the pre-tax yield calculation, income for directly held real estate and other consolidated investments is net of investee level expenses (depreciation and asset level operating expenses reported in investment expense). Fixed income securities investment balances exclude unrealized capital gains and losses. Equity securities investment balances use cost in the calculation. (5) Due to the adoption of the recognition and measurement accounting standard on January 1, 2018, equity securities are reported at fair value with changes in fair value recognized in valuation of equity investments, and are no longer included in impairment write-downs, change in intent write-downs and sales. (6) Total return on investment portfolio is calculated from GAAP results, including the total of net investment income, realized capital gains and losses, the change in unrealized net capital gains and losses, and the change in the difference between fair value and carrying value of mortgage loans, cost method limited partnerships for periods prior to 2018, bank loans and agent loans divided by the average fair value balances. (7) Average investment balances for the quarter are calculated as the average of the current and prior quarter investment balances. Year-to-date average investment balances are calculated as the average of investment balances at the beginning of the year and the end of each quarter during the year. For purposes of the average investment balances calculation, unrealized capital gains and losses on fixed income securities are excluded and equity securities investment balances are at cost. The Allstate Corporation 4Q18 Supplement 51

 
The Allstate Corporation Net Investment Income, Yields and Realized Capital Gains and Losses (Pre-Tax) by Segment ($ in millions) Three months ended December 31, 2018 Property- Service Allstate Allstate Allstate Corporate Liability Businesses Life Benefits Annuities and Other Total Net Investment Income Fixed income securities $ 253 $ 7 $ 89 $ 12 $ 159 $ 13 $ 533 Equity securities 28 1 - 1 9 1 40 Mortgage loans 4 - 21 3 26 - 54 Limited partnership interests ("LP") 77 - - - 65 - 142 Short-term 14 1 2 - 4 2 23 Other 30 - 19 4 13 1 67 Investment income, before expense 406 9 131 20 276 17 859 Less: Investment expense (42) - (6) - (23) (2) (73) Net investment income $ 364 $ 9 $ 125 $ 20 $ 253 $ 15 $ 786 Net investment income, after-tax $ 301 $ 7 $ 101 $ 16 $ 201 $ 13 $ 639 Interest-bearing investments (1) $ 288 $ 8 $ 131 $ 19 $ 197 $ 16 $ 659 Equity securities 28 1 - 1 9 1 40 LP and other alternative investments (2) 90 - - - 70 - 160 Investment income, before expense $ 406 $ 9 $ 131 $ 20 $ 276 $ 17 $ 859 Pre-Tax Yields (3) Fixed income securities 3.2 % 2.8 % 4.8 % 4.1 % 4.5 % 2.8 % 3.7 % Equity securities 3.1 5.7 5.4 5.2 2.8 3.3 3.2 Mortgage loans 4.2 - 4.5 4.4 4.9 - 4.6 Limited partnership interests 7.2 - - - 7.8 - 7.5 Total portfolio 3.6 3.1 4.8 4.5 4.9 3.0 4.1 Interest-bearing investments 3.3 2.8 4.8 4.4 4.6 2.9 3.9 Realized Capital Gains and Losses (Pre-tax) by transaction type Impairment write-downs (4) $ (2) $ - $ (1) $ - $ (1) $ - $ (4) Change in intent write-downs (4) - - - - - - - Net other-than-temporary impairment losses recognized in earnings (2) - (1) - (1) - (4) Sales (4) (44) (1) (1) (2) (11) (17) (76) Valuation of equity investments (4) (636) (4) (3) (7) (181) (9) (840) Valuation and settlements of derivative instruments 27 - - - (1) - 26 Total $ (655) $ (5) $ (5) $ (9) $ (194) $ (26) $ (894) (1) Comprised of fixed income securities, mortgage loans, short-term investments, and other investments including bank and agent loans and derivatives. (2) Comprised of limited partnership interests and other alternative investments, including real estate investments classified as other investments. (3) Quarterly pre-tax yield is calculated as annualized quarterly investment income, before investment expense divided by the average of the current and prior quarter investment balances. For the purposes of the pre-tax yield calculation, income for directly held real estate and other consolidated investments is net of investee level expenses (depreciation and asset level operating expenses reported in investment expense). Fixed income securities investment balances exclude unrealized capital gains and losses. Equity securities investment balances use cost in the calculation. (4) Due to the adoption of the recognition and measurement accounting standard on January 1, 2018, equity securities are reported at fair value with changes in fair value recognized in valuation of equity investments, and are no longer included in impairment write-downs, change in intent write-downs and sales. The Allstate Corporation 4Q18 Supplement 52

 
The Allstate Corporation Net Investment Income, Yields and Realized Capital Gains and Losses (Pre-Tax) by Segment ($ in millions) Twelve months ended December 31, 2018 Property- Service Allstate Allstate Allstate Corporate Liability Businesses Life Benefits Annuities and Other Total Net Investment Income Fixed income securities $ 943 $ 21 $ 357 $ 48 $ 644 $ 64 $ 2,077 Equity securities 121 4 2 3 38 2 170 Mortgage loans 17 - 90 9 101 - 217 Limited partnership interests ("LP") 378 - - - 327 - 705 Short-term 40 2 8 1 14 8 73 Other 123 - 70 18 56 5 272 Investment income, before expense 1,622 27 527 79 1,180 79 3,514 Less: Investment expense (158) - (22) (2) (84) (8) (274) Net investment income $ 1,464 $ 27 $ 505 $ 77 $ 1,096 $ 71 $ 3,240 (1) Net investment income, after-tax $ 1,186 $ 22 $ 400 $ 61 $ 867 $ 59 $ 2,595 Interest-bearing investments (2) $ 1,076 $ 23 $ 525 $ 76 $ 793 $ 77 $ 2,570 Equity securities 121 4 2 3 38 2 170 LP and other alternative investments (3) 425 - - - 349 - 774 Investment income, before expense $ 1,622 $ 27 $ 527 $ 79 $ 1,180 $ 79 $ 3,514 Pre-Tax Yields (4) Fixed income securities 3.0 % 2.5 % 4.8 % 4.2 % 4.5 % 2.9 % 3.6 % Equity securities 3.1 3.3 4.3 3.5 3.0 3.5 3.1 Mortgage loans 4.1 - 4.9 4.4 4.7 - 4.7 Limited partnership interests 9.3 - - - 9.8 - 9.5 Total portfolio 3.7 2.6 4.9 4.5 5.2 2.9 4.2 Interest-bearing investments 3.1 2.5 4.9 4.5 4.5 2.8 3.8 Realized Capital Gains and Losses (Pre-tax) by transaction type Impairment write-downs (5) $ (5) $ - $ (2) $ - $ (7) $ - $ (14) Change in intent write-downs (5) - - - - - - - Net other-than-temporary impairment losses recognized in earnings (5) - (2) - (7) - (14) Sales (5) (148) (5) (8) (2) (23) (29) (215) Valuation of equity investments (5) (522) (6) (4) (7) (143) (9) (691) Valuation and settlements of derivative instruments 36 - - - 7 - 43 Total $ (639) $ (11) $ (14) $ (9) $ (166) $ (38) $ (877) (1) Includes adjustments to provisional amounts recorded for the Tax Legislation. (2) Comprised of fixed income securities, mortgage loans, short-term investments, and other investments including bank and agent loans and derivatives. (3) Comprised of limited partnership interests and other alternative investments, including real estate investments classified as other investments. (4) Year-to-date pre-tax yield is calculated as annualized year-to-date investment income, before investment expense divided by the average of investment balances at the beginning of the year and the end of each quarter during the year. For the purposes of the pre-tax yield calculation, income for directly held real estate and other consolidated investments is net of investee level expenses (depreciation and asset level operating expenses reported in investment expense). Fixed income securities investment balances exclude unrealized capital gains and losses. Equity securities investment balances use cost in the calculation. (5) Due to the adoption of the recognition and measurement accounting standard on January 1, 2018, equity securities are reported at fair value with changes in fair value recognized in valuation of equity investments, and are no longer included in impairment write-downs, change in intent write-downs and sales. The Allstate Corporation 4Q18 Supplement 53

 
The Allstate Corporation Investment Position and Results by Strategy ($ in millions) As of or for the three months ended As of or for the twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Market-Based (1) Investment Position Interest-bearing investments $ 67,757 $ 68,441 $ 67,733 $ 67,934 $ 68,648 $ 69,070 $ 68,331 $ 68,836 $ 67,757 $ 68,648 Equity securities (2) 4,775 6,725 6,670 6,818 6,483 6,336 6,021 5,578 4,775 6,483 LP and other alternative investments (3) 691 764 930 828 738 694 591 555 691 738 Total $ 73,223 $ 75,930 $ 75,333 $ 75,580 $ 75,869 $ 76,100 $ 74,943 $ 74,969 $ 73,223 $ 75,869 Investment income Interest-bearing investments $ 656 $ 648 $ 638 $ 619 $ 620 $ 625 $ 629 $ 624 $ 2,561 $ 2,498 Equity securities 40 36 59 34 44 37 45 35 169 161 LP and other alternative investments 2 1 - 1 1 1 - - 4 2 Investment income, before expense 698 685 697 654 665 663 674 659 2,734 2,661 Investee level expenses (4) (2) (2) (1) (2) (1) (1) (2) (1) (7) (5) Income for yield calculation $ 696 $ 683 $ 696 $ 652 $ 664 $ 662 $ 672 $ 658 $ 2,727 $ 2,656 Market-based pre-tax yield 3.8 % 3.7 % 3.8 % 3.5 % 3.6 % 3.6 % 3.7 % 3.6 % 3.7 % 3.6 % Realized capital gains and losses (pre-tax) by transaction type Impairment write-downs (5) $ (4) $ (3) $ (3) $ (1) $ (8) $ (7) $ (19) $ (36) $ (11) $ (70) Change in intent write-downs (5) - - - - (5) (5) (22) (16) - (48) Net other-than-temporary impairment losses recognized in earnings (4) (3) (3) (1) (13) (12) (41) (52) (11) (118) Sales (5) (81) (25) (74) (42) 141 148 129 208 (222) 626 Valuation of equity investments (5) (853) 194 15 (83) - - - - (727) - Valuation and settlements of derivative instruments 16 (3) 1 - 1 (12) (1) (10) 14 (22) Total $ (922) $ 163 $ (61) $ (126) $ 129 $ 124 $ 87 $ 146 $ (946) $ 486 Performance-Based (6) Investment Position Interest-bearing investments $ 113 $ 124 $ 112 $ 115 $ 120 $ 130 $ 129 $ 108 $ 113 $ 120 Equity securities 261 240 218 168 138 98 96 107 261 138 LP and other alternative investments 7,663 7,674 7,578 7,426 6,676 6,443 6,137 5,959 7,663 6,676 Total $ 8,037 $ 8,038 $ 7,908 $ 7,709 $ 6,934 $ 6,671 $ 6,362 $ 6,174 $ 8,037 $ 6,934 Investment income Interest-bearing investments $ 3 $ 2 $ 1 $ 3 $ 3 $ 2 $ 2 $ 1 $ 9 $ 8 Equity securities - (1) 2 - - - 4 9 1 13 LP and other alternative investments 158 228 190 194 303 233 265 130 770 931 Investment income, before expense 161 229 193 197 306 235 271 140 780 952 Investee level expenses (16) (15) (17) (16) (10) (8) (8) (9) (64) (35) Income for yield calculation $ 145 $ 214 $ 176 $ 181 $ 296 $ 227 $ 263 $ 131 $ 716 $ 917 Performance-based pre-tax yield 7.2 % 10.8 % 9.0 % 9.9 % 17.4 % 14.0 % 16.8 % 8.7 % 9.3 % 14.3 % Realized capital gains and losses (pre-tax) by transaction type Impairment write-downs $ - $ (2) $ (1) $ - $ - $ (16) $ (9) $ (7) $ (3) $ (32) Change in intent write-downs - - - - - - - - - - Net other-than-temporary impairment losses recognized in earnings - (2) (1) - - (16) (9) (7) (3) (32) Sales 5 3 (1) - 5 - 10 - 7 15 Valuation of equity investments 13 4 19 - - - - - 36 - Valuation and settlements of derivative instruments 10 8 19 (8) (7) (5) (7) (5) 29 (24) Total $ 28 $ 13 $ 36 $ (8) $ (2) $ (21) $ (6) $ (12) $ 69 $ (41) (1) Market-based strategy seeks to deliver predictable earnings aligned to business needs and take advantage of short-term opportunities primarily through public and private fixed income investments and public equity securities. (2) Equity securities may include investments in exchange traded and mutual funds whose underlying investments are fixed income securities. (3) Market-based investments include publicly traded equity securities classified as limited partnerships. (4) When calculating the pre-tax yields, investee level expenses are netted against income for directly held real estate and other consolidated investments. (5) Due to the adoption of the recognition and measurement accounting standard on January 1, 2018, equity securities are reported at fair value with changes in fair value recognized in valuation of equity investments, and are no longer included in impairment write-downs, change in intent write-downs and sales. (6) Performance-based strategy seeks to deliver attractive risk-adjusted returns and supplement market risk with idiosyncratic risk primarily through investments in private equity and real estate. The Allstate Corporation 4Q18 Supplement 54

 
The Allstate Corporation Investment Position and Results by Strategy and Segment ($ in millions) As of or for the three months ended December 31, 2018 Property- Service Allstate Allstate Allstate Corporate Liability Businesses Life Benefits Annuities and Other Total Market-based (1) Investment Position Interest-bearing investments $ 35,244 $ 1,072 $ 10,769 $ 1,759 $ 17,471 $ 1,442 $ 67,757 Equity securities (2) 3,324 131 40 50 1,203 27 4,775 LP and other alternative investments (3) 572 - - - 119 - 691 Total $ 39,140 $ 1,203 $ 10,809 $ 1,809 $ 18,793 $ 1,469 $ 73,223 Investment income Interest-bearing investments $ 286 $ 8 $ 131 $ 19 $ 196 $ 16 $ 656 Equity securities 28 1 - 1 9 1 40 LP and other alternative investments 2 - - - - - 2 Investment income, before expense 316 9 131 20 205 17 698 Investee level expenses (4) (2) - - - - - (2) Income for yield calculation $ 314 $ 9 $ 131 $ 20 $ 205 $ 17 $ 696 Market-based pre-tax yield 3.2 % 3.3 % 4.8 % 4.5 % 4.5 % 3.0 % 3.8 % Realized capital gains and losses (pre-tax) by transaction type Impairment write-downs (5) $ (2) $ - $ (1) $ - $ (1) $ - $ (4) Change in intent write-downs (5) - - - - - - - Net other-than-temporary impairment losses recognized in earnings (2) - (1) - (1) - (4) Sales (5) (50) (1) (1) (2) (10) (17) (81) Valuation of equity investments (5) (642) (4) (3) (7) (188) (9) (853) Valuation and settlements of derivative instruments 21 - - - (5) - 16 Total $ (673) $ (5) $ (5) $ (9) $ (204) $ (26) $ (922) Performance-based (6) Investment Position Interest-bearing investments $ 85 $ - $ - $ - $ 28 $ - $ 113 Equity securities 164 - - - 97 - 261 LP and other alternative investments 4,245 - - - 3,418 - 7,663 Total $ 4,494 $ - $ - $ - $ 3,543 $ - $ 8,037 Investment income Interest-bearing investments $ 2 $ - $ - $ - $ 1 $ - $ 3 Equity securities - - - - - - - LP and other alternative investments 88 - - - 70 - 158 Investment income, before expense 90 - - - 71 - 161 Investee level expenses (9) - - - (7) - (16) Income for yield calculation $ 81 $ - $ - $ - $ 64 $ - $ 145 Performance-based pre-tax yield 7.2 % n/a n/a n/a 7.2 % n/a 7.2 % Realized capital gains and losses (pre-tax) by transaction type Impairment write-downs $ - $ - $ - $ - $ - $ - $ - Change in intent write-downs - - - - - - - Net other-than-temporary impairment losses recognized in earnings - - - - - - - Sales 6 - - - (1) - 5 Valuation of equity investments 6 - - - 7 - 13 Valuation and settlements of derivative instruments 6 - - - 4 - 10 Total $ 18 $ - $ - $ - $ 10 $ - $ 28 (1) Market-based strategy seeks to deliver predictable earnings aligned to business needs and take advantage of short-term opportunities primarily through public and private fixed income investments and public equity securities. (2) Equity securities may include investments in exchange traded and mutual funds whose underlying investments are fixed income securities. (3) Market-based investments include publicly traded equity securities classified as limited partnerships. (4) When calculating the pre-tax yields, investee level expenses are netted against income for directly held real estate and other consolidated investments. (5) Due to the adoption of the recognition and measurement accounting standard on January 1, 2018, equity securities are reported at fair value with changes in fair value recognized in valuation of equity investments, and are no longer included in impairment write-downs, change in intent write-downs and sales. (6) Performance-based strategy seeks to deliver attractive risk-adjusted returns and supplement market risk with idiosyncratic risk primarily through investments in private equity and real estate. The Allstate Corporation 4Q18 Supplement 55

 
The Allstate Corporation Investment Position and Results by Strategy and Segment ($ in millions) As of or for the twelve months ended December 31, 2018 Property- Service Allstate Allstate Allstate Corporate Liability Businesses Life Benefits Annuities and Other Total Market-based (1) Investment Position Interest-bearing investments $ 35,244 $ 1,072 $ 10,769 $ 1,759 $ 17,471 $ 1,442 $ 67,757 Equity securities (2) 3,324 131 40 50 1,203 27 4,775 LP and other alternative investments (3) 572 - - - 119 - 691 Total $ 39,140 $ 1,203 $ 10,809 $ 1,809 $ 18,793 $ 1,469 $ 73,223 Investment income Interest-bearing investments $ 1,069 $ 23 $ 525 $ 76 $ 791 $ 77 $ 2,561 Equity securities 120 4 2 3 38 2 169 LP and other alternative investments 4 - - - - - 4 Investment income, before expense 1,193 27 527 79 829 79 2,734 Investee level expenses (4) (7) - - - - - (7) Income for yield calculation $ 1,186 $ 27 $ 527 $ 79 $ 829 $ 79 $ 2,727 Market-based pre-tax yield 3.1 % 3.5 % 4.9 % 4.5 % 4.4 % 2.9 % 3.7 % Realized capital gains and losses (pre-tax) by transaction type Impairment write-downs (5) $ (2) $ - $ (2) $ - $ (7) $ - $ (11) Change in intent write-downs (5) - - - - - - - Net other-than-temporary impairment losses recognized in earnings (2) - (2) - (7) - (11) Sales (5) (155) (5) (8) (2) (23) (29) (222) Valuation of equity investments (5) (541) (6) (4) (7) (160) (9) (727) Valuation and settlements of derivative instruments 19 - - - (5) - 14 Total $ (679) $ (11) $ (14) $ (9) $ (195) $ (38) $ (946) Performance-based (6) Investment Position Interest-bearing investments $ 85 $ - $ - $ - $ 28 $ - $ 113 Equity securities 164 - - - 97 - 261 LP and other alternative investments 4,245 - - - 3,418 - 7,663 Total $ 4,494 $ - $ - $ - $ 3,543 $ - $ 8,037 Investment income Interest-bearing investments $ 7 $ - $ - $ - $ 2 $ - $ 9 Equity securities 1 - - - - - 1 LP and other alternative investments 421 - - - 349 - 770 Investment income, before expense 429 - - - 351 - 780 Investee level expenses (38) - - - (26) - (64) Income for yield calculation $ 391 $ - $ - $ - $ 325 $ - $ 716 Performance-based pre-tax yield 9.2 % n/a n/a n/a 9.4 % n/a 9.3 % Realized capital gains and losses (pre-tax) by transaction type Impairment write-downs $ (3) $ - $ - $ - $ - $ - $ (3) Change in intent write-downs - - - - - - - Net other-than-temporary impairment losses recognized in earnings (3) - - - - - (3) Sales 7 - - - - - 7 Valuation of equity investments 19 - - - 17 - 36 Valuation and settlements of derivative instruments 17 - - - 12 - 29 Total $ 40 $ - $ - $ - $ 29 $ - $ 69 (1) Market-based strategy seeks to deliver predictable earnings aligned to business needs and take advantage of short-term opportunities primarily through public and private fixed income investments and public equity securities. (2) Equity securities may include investments in exchange traded and mutual funds whose underlying investments are fixed income securities. (3) Market-based investments include publicly traded equity securities classified as limited partnerships. (4) When calculating the pre-tax yields, investee level expenses are netted against income for directly held real estate and other consolidated investments. (5) Due to the adoption of the recognition and measurement accounting standard on January 1, 2018, equity securities are reported at fair value with changes in fair value recognized in valuation of equity investments, and are no longer included in impairment write-downs, change in intent write-downs and sales. (6) Performance-based strategy seeks to deliver attractive risk-adjusted returns and supplement market risk with idiosyncratic risk primarily through investments in private equity and real estate. The Allstate Corporation 4Q18 Supplement 56

 
The Allstate Corporation Performance-Based Investments ($ in millions) As of or for the three months ended As of or for the twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Investment position Limited partnerships Private equity $ 5,724 $ 5,712 $ 5,585 $ 5,437 $ 4,752 $ 4,650 $ 4,333 $ 4,139 $ 5,724 $ 4,752 Real estate 1,134 1,170 1,207 1,212 1,293 1,296 1,320 1,325 1,134 1,293 PB - limited partnerships 6,858 6,882 6,792 6,649 6,045 5,946 5,653 5,464 6,858 6,045 Non-LP Private equity 343 327 300 249 210 170 171 161 343 210 Real estate 836 829 816 811 679 555 538 549 836 679 PB - non-LP 1,179 1,156 1,116 1,060 889 725 709 710 1,179 889 Total Private equity 6,067 6,039 5,885 5,686 4,962 4,820 4,504 4,300 6,067 4,962 Real estate 1,970 1,999 2,023 2,023 1,972 1,851 1,858 1,874 1,970 1,972 Total PB $ 8,037 $ 8,038 $ 7,908 $ 7,709 $ 6,934 $ 6,671 $ 6,362 $ 6,174 $ 8,037 $ 6,934 Investment income Limited partnerships Private equity $ 130 $ 123 $ 152 $ 177 $ 219 $ 183 $ 209 $ 114 $ 582 $ 725 Real estate 12 87 21 3 74 40 44 6 123 164 PB - limited partnerships 142 210 173 180 293 223 253 120 705 889 Non-LP Private equity 2 1 4 2 3 2 5 9 9 19 Real estate 17 18 16 15 10 10 13 11 66 44 PB - non-LP 19 19 20 17 13 12 18 20 75 63 Total Private equity 132 124 156 179 222 185 214 123 591 744 Real estate 29 105 37 18 84 50 57 17 189 208 Total PB $ 161 $ 229 $ 193 $ 197 $ 306 $ 235 $ 271 $ 140 $ 780 $ 952 Investee level expenses $ (16) $ (15) $ (17) $ (16) $ (10) $ (8) $ (8) $ (9) $ (64) $ (35) Realized capital gains and losses Limited partnerships Private equity $ (3) $ 1 $ (1) $ - $ (3) $ (17) $ (8) $ (10) $ (3) $ (38) Real estate - (2) - - 2 - 4 1 (2) 7 PB - limited partnerships (3) (1) (1) - (1) (17) (4) (9) (5) (31) Non-LP Private equity 18 13 34 (8) (7) (4) (11) (4) 57 (26) Real estate 13 1 3 - 6 - 9 1 17 16 PB - non-LP 31 14 37 (8) (1) (4) (2) (3) 74 (10) Total Private equity 15 14 33 (8) (10) (21) (19) (14) 54 (64) Real estate 13 (1) 3 - 8 - 13 2 15 23 Total PB $ 28 $ 13 $ 36 $ (8) $ (2) $ (21) $ (6) $ (12) $ 69 $ (41) Pre-Tax Yield 7.2 % 10.8 % 9.0 % 9.9 % 17.4 % 14.0 % 16.8 % 8.7 % 9.3 % 14.3 % Internal Rate of Return (1) 10 Year 10.0 % 9.3 % 9.1 % 9.0 % 8.6 % 8.5 % 8.3 % 9.5 % 5 Year 12.3 % 13.0 % 13.1 % 13.0 % 12.8 % 12.7 % 11.9 % 11.9 % (1) The internal rate of return ("IRR") is one of the measures we use to evaluate the performance of these investments. The IRR represents the rate of return on the investments considering the cash flows paid and received and, until the investment is fully liquidated, the estimated value of investment holdings at the end of the measurement period. The calculated IRR for any measurement period is highly influenced by the values of the portfolio at the beginning and end of the period, which reflect the estimated fair values of the investments as of such dates. As a result, the IRR can vary significantly for different measurement periods based on macroeconomic or other events that impact the estimated beginning or ending portfolio value, such as the global financial crisis. Our IRR calculation method may differ from those used by other investors. The timing of the recognition of income in the financial statements may differ significantly from the cash distributions and changes in the value of these investments. The Allstate Corporation 4Q18 Supplement 57

 
The Allstate Corporation Limited Partnership Interests ($ in millions) As of or for the three months ended As of or for the twelve months ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 Investment position Underlying investment Private equity $ 5,724 $ 5,712 $ 5,585 $ 5,437 $ 4,752 $ 4,650 $ 4,333 $ 4,139 $ 5,724 $ 4,752 Real estate 1,134 1,170 1,207 1,212 1,293 1,296 1,320 1,325 1,134 1,293 Other (1) 647 720 887 785 695 654 553 518 647 695 Total $ 7,505 $ 7,602 $ 7,679 $ 7,434 $ 6,740 $ 6,600 $ 6,206 $ 5,982 $ 7,505 $ 6,740 Accounting basis Equity method ("EMA") $ 5,726 $ 5,893 $ 6,029 $ 5,771 $ 5,413 $ 5,261 $ 4,937 $ 4,689 $ 5,726 $ 5,413 Fair value (2) 1,779 1,709 1,650 1,663 1,327 1,339 1,269 1,293 1,779 1,327 Total $ 7,505 $ 7,602 $ 7,679 $ 7,434 $ 6,740 $ 6,600 $ 6,206 $ 5,982 $ 7,505 $ 6,740 Approximate cumulative pre-tax appreciation (3) $ 1,236 $ 1,308 $ 1,366 $ 1,347 $ 854 $ 858 $ 787 $ 611 $ 1,236 $ 854 Investment income Underlying investment Private equity $ 130 $ 123 $ 152 $ 177 $ 219 $ 183 $ 209 $ 114 $ 582 $ 725 Real estate 12 87 21 3 74 40 44 6 123 164 Total $ 142 $ 210 $ 173 $ 180 $ 293 $ 223 $ 253 $ 120 $ 705 $ 889 Accounting basis Equity method ("EMA") $ 70 $ 135 $ 143 $ 103 $ 246 $ 159 $ 202 $ 83 $ 451 $ 690 Fair value (2) 72 75 30 77 47 64 51 37 254 199 Total Total (3) $ 142 $ 210 $ 173 $ 180 $ 293 $ 223 $ 253 $ 120 $ 705 $ 889 (1) Comprised of certain limited partnerships where the underlying assets are predominately public equity securities with changes in fair value, including distributions received, reported as realized capital gains and losses. (2) Due to the adoption of the recognition and measurement accounting standard on January 1, 2018, limited partnerships previously reported using the cost method are now reported at fair value with changes in fair value recognized in net investment income. Prior periods continue to reflect cost method. (3) Beginning January 1, 2018, approximate cumulative pre-tax appreciation includes limited partnerships accounted for under EMA and at fair value. Prior periods included EMA limited partnerships only. The Allstate Corporation 4Q18 Supplement 58

 
Definitions of Non-GAAP Measures We believe that investors’ understanding of Allstate’s performance is enhanced by our disclosure of the following non-GAAP measures. Our methods for calculating these measures may differ from those used by other companies and therefore comparability may be limited. Adjusted net income is net income applicable to common shareholders, excluding: • realized capital gains and losses, after-tax, except for periodic settlements and accruals on non-hedge derivative instruments, which are reported with realized capital gains and losses but included in adjusted net income, • valuation changes on embedded derivatives not hedged, after-tax, • amortization of deferred policy acquisition costs ("DAC") and deferred sales inducements (“DSI”), to the extent they resulted from the recognition of certain realized capital gains and losses or valuation changes on embedded derivatives not hedged, after-tax, • business combination expenses and the amortization of purchased intangible assets, after-tax, • gain (loss) on disposition of operations, after-tax, and • adjustments for other significant non-recurring, infrequent or unusual items, when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, or (b) there has been no similar charge or gain within the prior two years. Net income applicable to common shareholders is the GAAP measure that is most directly comparable to adjusted net income. We use adjusted net income as an important measure to evaluate our results of operations. We believe that the measure provides investors with a valuable measure of the Company's ongoing performance because it reveals trends in our insurance and financial service business that may be obscured by the net effect of realized capital gains and losses, valuation changes on embedded derivatives not hedged, business combination expenses and the amortization of purchased intangible assets, gain (loss) on disposition of operations and adjustments for other significant non-recurring, infrequent or unusual items. Realized capital gains and losses, valuation changes on embedded derivatives not hedged and gain (loss) on disposition of operations may vary significantly between periods and are generally driven by business decisions and external economic developments such as capital market conditions, the timing of which is unrelated to the insurance underwriting process. Consistent with our intent to protect results or earn additional income, adjusted net income includes periodic settlements and accruals on certain derivative instruments that are reported in realized capital gains and losses because they do not qualify for hedge accounting or are not designated as hedges for accounting purposes. These instruments are used for economic hedges and to replicate fixed income securities, and by including them in adjusted net income, we are appropriately reflecting their trends in our performance and in a manner consistent with the economically hedged investments, product attributes (e.g. net investment income and interest credited to contractholder funds) or replicated investments. Business combination expenses are excluded because they are non-recurring in nature and the amortization of purchased intangible assets is excluded because it relates to the acquisition purchase price and is not indicative of our underlying insurance business results or trends. Non-recurring items are excluded because, by their nature, they are not indicative of our business or economic trends. Accordingly, adjusted net income excludes the effect of items that tend to be highly variable from period to period and highlights the results from ongoing operations and the underlying profitability of our business. A byproduct of excluding these items to determine adjusted net income is the transparency and understanding of their significance to net income variability and profitability while recognizing these or similar items may recur in subsequent periods. Adjusted net income is used by management along with the other components of net income applicable to common shareholders to assess our performance. We use adjusted measures of adjusted net income in incentive compensation. Therefore, we believe it is useful for investors to evaluate net income applicable to common shareholders, adjusted net income and their components separately and in the aggregate when reviewing and evaluating our performance. We note that investors, financial analysts, financial and business media organizations and rating agencies utilize adjusted net income results in their evaluation of our and our industry's financial performance and in their investment decisions, recommendations and communications as it represents a reliable, representative and consistent measurement of the industry and the Company and management's performance. We note that the price to earnings multiple commonly used by insurance investors as a forward-looking valuation technique uses adjusted net income as the denominator. Adjusted net income should not be considered a substitute for net income applicable to common shareholders and does not reflect the overall profitability of our business. A reconciliation of adjusted net income to net income applicable to common shareholders is provided in the schedule, "Contribution to Income". Combined ratio excluding the effect of catastrophes, prior year reserve reestimates and amortization of purchased intangible assets ("underlying combined ratio") is a non-GAAP ratio, which is computed as the difference between four GAAP operating ratios: the combined ratio, the effect of catastrophes on the combined ratio, the effect of prior year non-catastrophe reserve reestimates on the combined ratio, the effect of amortization of purchased intangible assets on the combined ratio. We believe that this ratio is useful to investors and it is used by management to reveal the trends in our Property-Liability business that may be obscured by catastrophe losses, prior year reserve reestimates and amortization of purchased intangible assets. Catastrophe losses cause our loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on the combined ratio. Prior year reserve reestimates are caused by unexpected loss development on historical reserves which could increase or decrease current year income. Amortization of purchased intangible assets relates to the acquisition purchase price and is not indicative of our underlying insurance business results or trends. We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our underwriting performance. We also provide it to facilitate a comparison to our outlook on the underlying combined ratio. The most directly comparable GAAP measure is the combined ratio. The underlying combined ratio should not be considered a substitute for the combined ratio and does not reflect the overall underwriting profitability of our business. A reconciliation of the underlying combined ratio to combined ratio is provided in the schedules "Property-Liability Results", "Allstate Brand Profitability Measures", "Esurance Brand Profitability Measures and Statistics", "Encompass Brand Profitability Measures and Statistics", "Auto Profitability Measures by Brand", "Homeowners Profitability Measures by Brand", "Other Personal Lines Profitability Measures by Brand" and "Commercial Lines Profitability Measures". Average underlying loss (incurred pure premium) and expense is calculated as the underlying combined ratio (a non-GAAP measure) multiplied by the GAAP quarterly earned premium, which is annualized (multiplied by 4) (“average premium”). We believe that this measure is useful to investors and it is used by management for the same reasons noted above for the underlying combined ratio. A reconciliation of average underlying loss and expense is provided in the schedule, "Allstate Brand Statistics". The Allstate Corporation 4Q18 Supplement 59

 
Definitions of Non-GAAP Measures (continued) Underlying loss ratio is a non-GAAP ratio, which is computed as the difference between three GAAP operating ratios: the loss ratio, the effect of catastrophes on the combined ratio and the effect of prior year non-catastrophe reserve reestimates on the combined ratio. We believe that this ratio is useful to investors and it is used by management to reveal the trends that may be obscured by catastrophe losses and prior year reserve reestimates. Catastrophe losses cause our loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on the combined ratio. Prior year reserve reestimates are caused by unexpected loss development on historical reserves. We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our underwriting performance. The most directly comparable GAAP measure is the loss ratio. The underlying loss ratio should not be considered a substitute for the loss ratio and does not reflect the overall loss ratio of our business. A reconciliation of underlying loss ratio is provided in the schedules "Property-Liability Results", "Allstate Brand Profitability Measures", "Esurance Brand Profitability Measures and Statistics", "Encompass Brand Profitability Measures and Statistics", "Auto Profitability Measures by Brand", "Homeowners Profitability Measures by Brand" and "Other Personal Lines Profitability Measures by Brand". Adjusted net income return on common shareholders' equity is a ratio that uses a non-GAAP measure. It is calculated by dividing the rolling 12-month adjusted net income by the average of common shareholders’ equity at the beginning and at the end of the 12-months, after excluding the effect of unrealized net capital gains and losses. Return on common shareholders' equity is the most directly comparable GAAP measure. We use adjusted net income as the numerator for the same reasons we use adjusted net income, as discussed above. We use average common shareholders' equity excluding the effect of unrealized net capital gains and losses for the denominator as a representation of common shareholders’ equity primarily attributable to the Company’s earned and realized business operations because it eliminates the effect of items that are unrealized and vary significantly between periods due to external economic developments such as capital market conditions like changes in equity prices and interest rates, the amount and timing of which are unrelated to the insurance underwriting process. We use it to supplement our evaluation of net income applicable to common shareholders and return on common shareholders' equity because it excludes the effect of items that tend to be highly variable from period to period. We believe that this measure is useful to investors and that it provides a valuable tool for investors when considered along with return on common shareholders' equity because it eliminates the after-tax effects of realized and unrealized net capital gains and losses that can fluctuate significantly from period to period and that are driven by economic developments, the magnitude and timing of which are generally not influenced by management. In addition, it eliminates non-recurring items that are not indicative of our ongoing business or economic trends. A byproduct of excluding the items noted above to determine adjusted net income return on common shareholders' equity from return on common shareholders' equity is the transparency and understanding of their significance to return on common shareholders' equity variability and profitability while recognizing these or similar items may recur in subsequent periods. We use adjusted measures of adjusted net income return on common shareholders' equity in incentive compensation. Therefore, we believe it is useful for investors to have adjusted net income return on common shareholders' equity and return on common shareholders' equity when evaluating our performance. We note that investors, financial analysts, financial and business media organizations and rating agencies utilize adjusted net income return on common shareholders' equity results in their evaluation of our and our industry’s financial performance and in their investment decisions, recommendations and communications as it represents a reliable, representative and consistent measurement of the industry and the company and management’s utilization of capital. Adjusted net income return on common shareholders' equity should not be considered a substitute for return on common shareholders' equity and does not reflect the overall profitability of our business. A reconciliation of return on common shareholders' equity and adjusted net income return on common shareholders' equity can be found in the schedule, "Return on Common Shareholders' Equity". Adjusted net income return on adjusted equity is a ratio that uses a non-GAAP measure. It is calculated by dividing the rolling 12-month adjusted net income by the average of equity at the beginning and at the end of the 12-months, after excluding the effect of unrealized net capital gains and losses and goodwill. Return on equity is the most directly comparable GAAP measure. We use average equity excluding the effect of unrealized net capital gains and losses and goodwill for the denominator as a representation of equity primarily attributable to the Company’s earned and realized business operations. Unrealized net capital gains and losses are excluded because they vary significantly between periods due to external economic developments such as capital market conditions like changes in equity prices and interest rates, the amount and timing of which are unrelated to the insurance underwriting process. Goodwill is excluded because it relates to the acquisition purchase price and is not indicative of our underlying business results. We believe it is useful for investors to have adjusted net income return on adjusted equity when evaluating our performance as it represents a reliable, representative and consistent measurement of the company and management’s utilization of capital. Adjusted net income return on adjusted equity should not be considered a substitute for return on equity and does not reflect the overall profitability of our business. A reconciliation of return on equity and adjusted net income return on adjusted equity can be found in the schedules, "Allstate Life Return on Equity", "Allstate Benefits Return on Equity" and "Allstate Annuities Return on Equity". Adjusted net income, excluding purchase accounting adjustments, is a non-GAAP measure, which is computed as net income (loss) applicable to common shareholders, excluding amortization of purchased intangible assets, after-tax, and realized capital gains and losses, after-tax, and adjusted for the after-tax income statement effects of acquisition-related purchase accounting fair value adjustments to unearned premiums, contractual liability insurance policy premium expenses, and commissions paid to retailers. Net income (loss) applicable to shareholders is the GAAP measure that is most directly comparable to adjusted net income, excluding purchase accounting adjustments. We use adjusted net income, excluding purchase accounting adjustments, as an important measure to evaluate SquareTrade’s results of operations. We believe that the measure provides investors with a valuable measure of SquareTrade’s ongoing performance because it reveals trends that may be obscured by the amortization of purchased intangible assets, the acquisition-related purchase accounting fair value adjustments, and the net effects of realized capital gains and losses. Amortization of purchased intangible assets is excluded because it relates to the acquisition purchase price and is not indicative of our business results or trends. We adjust for the effects of acquisition-related purchase accounting fair value adjustments because they relate to the acquisition and their effects are not indicative of the underlying business results and trends. Realized capital gains and losses may vary significantly between periods and are generally driven by business decisions and external economic developments such as capital market conditions, the timing of which is unrelated to SquareTrade’s operations. Adjusted net income, excluding purchase accounting adjustments, highlights the results from ongoing operations and the underlying profitability of our business and is used by management along with the other components of net income applicable to common shareholders to assess our performance. We believe it is useful for investors to evaluate net income applicable to common shareholders, adjusted net income, excluding purchase accounting adjustments, and their components separately and in the aggregate when reviewing and evaluating SquareTrade’s performance. Adjusted net income, excluding purchase accounting adjustments, should not be considered a substitute for net income applicable to common shareholders and does not reflect the overall profitability of our business. A reconciliation of net income (loss) applicable to common shareholders to adjusted net income, excluding purchase accounting adjustments, is provided in the schedule, "SquareTrade Results". Book value per common share, excluding the impact of unrealized net capital gains and losses on fixed income securities, is a ratio that uses a non-GAAP measure. It is calculated by dividing common shareholders’ equity after excluding the impact of unrealized net capital gains and losses on fixed income securities and related DAC, DSI and life insurance reserves by total common shares outstanding plus dilutive potential common shares outstanding. We use the trend in book value per common share, excluding the impact of unrealized net capital gains and losses on fixed income securities, in conjunction with book value per common share to identify and analyze the change in net worth attributable to management efforts between periods. We believe the non-GAAP ratio is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period and are generally driven by economic developments, primarily capital market conditions, the magnitude and timing of which are generally not influenced by management, and we believe it enhances understanding and comparability of performance by highlighting underlying business activity and profitability drivers. We note that book value per common share, excluding the impact of unrealized net capital gains and losses on fixed income securities, is a measure commonly used by insurance investors as a valuation technique. Book value per common share is the most directly comparable GAAP measure. Book value per common share, excluding the impact of unrealized net capital gains and losses on fixed income securities, should not be considered a substitute for book value per common share, and does not reflect the recorded net worth of our business. A reconciliation of book value per common share, excluding the impact of unrealized net capital gains on fixed income securities, and book value per common share can be found in the schedule, "Book Value per Common Share". The Allstate Corporation 4Q18 Supplement 60